The Price- To- Cash- Flow Method of Share Valuation Generally

question 4

Multiple Choice

The price- to- cash- flow method of share valuation generally

• A) uses EBITDA as the cash flow value.
• B) applies the P/E multiple to the cash flow per share value.
• C) produces a cash flow multiple that is greater than the P/E multiple.
• D) relies on historical cash flows.

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Definitions:

Reinforcement

In behavioral psychology, reinforcement is a process by which a behavior is strengthened or increased in frequency by the consequence that follows it.

Green

A color perceived when light with a wavelength between approximately 495–570 nm is detected by the eye, commonly associated with nature and growth.

Operant Response

A behavior that is modifiable by its consequences, including reinforcement or punishment, within the context of operant conditioning.

Extinction

In psychology, the gradual weakening and eventual disappearance of a conditioned response when the conditioned stimulus is no longer paired with the unconditioned stimulus.