The Cash Multiple Does Not Depend on the Amount of Time

question 42

Multiple Choice

The cash multiple does not depend on the amount of time it takes to receive the cash,nor does it account for the risk of the investment.It is therefore useful only for comparing deals

• A) with different time horizons and different risk levels.
• B) with similar time horizons and different risk levels.
• C) with similar time horizons and similar risk levels.
• D) with different time horizons and similar risk levels.

---

Definitions:

Refunding

The process of replacing an old debt with a new one, usually with better terms, such as a lower interest rate.

Old Issue

A topic or problem that has been present or discussed for a long time.

New Bond Issue

The process of offering new bonds to investors for the first time to raise capital for the issuer.

Convertible Bonds

Bonds that can be converted into a predetermined number of a company’s shares, at the option of the bondholder, usually at certain times during their life.