Which of the Following Statements Is False

question 47

Multiple Choice

Which of the following statements is false?

• A) The fact that a firm has an exceptional management team, has developed an efficient manufacturing process, or has just secured a patient on a new technology is ignored when we apply a valuation multiple.
• B) Valuation multiples have the advantage that they allow us to incorporate specific information about the firm's cost of capital or future growth.
• C) For firms with substantial tangible assets, the ratio of price to book value of equity per share is sometimes used.
• D) Using multiples will not help us determine if an entire industry is overvalued.

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Definitions:

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IQ Tests

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A form of intelligence that involves the ability to use knowledge, experience, and skills that have been learned over time.

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