Which of the Following Statements Is FALSE

question 35

Multiple Choice

Which of the following statements is FALSE?

• A) We can compute a firm's price-earnings ratio by using either trailing earnings or forward earnings with the resulting ratio called the trailing price-earnings or forward price-earnings.
• B) Using a valuation multiple based on comparables is best viewed as a "shortcut" to the discounted cash flow method of valuation.
• C) Because the enterprise value represents the entire value of the firm before the firm pays its debt, to form an appropriate multiple, we divide it by a measure of earnings or cash flows after interest payments are made.
• D) It is common practice to use valuation multiples based on the firm's enterprise value.

Recognize the importance of aligning resources with strategic intent for effective strategy execution.

Analyze the relationship between an organization’s mission, vision, and strategies.

Identify the role of strategic objectives and operating objectives in strategy execution.

Understand the significance of organizational culture and core values in strategic management.

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Definitions:

Mission

A statement or vision that defines the purpose, objectives, and approach of an organization.

Tuberculosis

A contagious bacterial infection caused by Mycobacterium tuberculosis that primarily affects the lungs, but may spread to other organs.

Hispanic

Relating to, characteristic of, or derived from the people, culture, or languages of Spain, Portugal, or Latin America.

Pacific Islander

A person originating from any of the three ethnogeographic groupings of Oceania: Micronesia, Melanesia, and Polynesia.