Which of the Following Statements Is FALSE

question 13

Multiple Choice

Which of the following statements is FALSE?

• A)Because capital expenditures can vary substantially from period to period,most practitioners rely on enterprise value to free cash flow multiples.
• B)Common multiples to consider are enterprise value to EBIT,EBITDA,and free cash flow.
• C)If two stocks have the same payout and EPS growth rates as well as equivalent risk,then they should have the same P/E ratio.
• D)Looking at enterprise value as a multiple of sales can be useful if it is reasonable to assume that the firms will maintain similar margins in the future.

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Definitions:

Centralized Decision-Making

A decision-making approach where major decisions are made by a small group or single entity within the organization, often at the top level.

Continuous Improvement

A sustained effort to refine products, services, or processes with gradual and radical enhancements.

PDCA

An iterative four-step management method used in business for the control and continuous improvement of processes and products. It stands for Plan-Do-Check-Act.

Plan-Do-Check-Act

A four-step management method used for the control and continuous improvement of processes and products.