The EV/EBITDA Ratio Has an Advantage Over the PE Ratio

question 8

Multiple Choice

The EV/EBITDA ratio has an advantage over the PE ratio in situations where comparisons are being made of firms that vary based on their

• A)method of depreciation.
• B)rate of growth.
• C)degree of leverage.
• D)level of cash.
• E)sales level.

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Definitions:

Supportive Communication

Engaging in dialogue that is empathetic, encourages positive relationships, and fosters mutual respect.

Organizational Silos

Refers to the separation of different departments or sectors within an organization, operating independently and with limited communication and cooperation.

Divisional Grapevine

Informal and unofficial channels of communication within a specific division or area of an organization.

Mum Effect

Occurs when people are reluctant to communicate bad news.