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The Enterprise to EBITDA Method of Valuation Can Be Compared

question 99

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The enterprise to EBITDA method of valuation can be compared more readily among firms exhibiting different levels of leverage than for other measures of earnings, since the numerator represents the total value of the firm and the denominator measures earnings before interest.


Definitions:

Contingency Table

A table used in statistics to summarize the relationship between several categorical variables.

Frequency of Occurrence

The number of times an event or a value appears in a given dataset or period of time.

Large-sample Z Tests

Statistical tests used to determine if there are differences between the means of two samples when the sample size is large.

Chi-square Statistic

A statistic that measures the difference between observed counts and counts expected under a specific hypothesis, used in tests of independence and goodness-of-fit.

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