The Price-To-Cash-Flow Method of Stock Valuation Generally

question 41

Multiple Choice

The price-to-cash-flow method of stock valuation generally

• A) uses EBITDA as the cash flow value.
• B) relies on historical cash flows.
• C) produces a cash flow multiple that is greater than the P/E multiple.
• D) applies the P/E multiple to the cash flow per share value.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.