Which of the Following Statements Is FALSE

question 33

Multiple Choice

Which of the following statements is FALSE?

• A) As the enterprise value represents the entire value of a firm before the firm pays its debt, to form an appropriate multiple, we divide it by a measure of earnings or cash flows after interest payments are made.
• B) We can compute a firm's price-earnings ratio by using either trailing earnings or forward earnings with the resulting ratio called the trailing price-earnings or forward price-earnings.
• C) It is common practice to use valuation multiples based on a firm's enterprise value.
• D) Using a valuation multiple based on comparables is best viewed as a "shortcut" to the discounted cash flow method of valuation.

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Definitions:

Logo Design

Logo design involves creating a unique symbol or graphic representation that identifies and differentiates a brand or organization.

Intergroup Relations

The interactions and dynamics that occur between different groups within a society, including cooperation, conflict, and competition.

Outgroup Leader

An individual who holds a leadership position or is influential in a group that is considered distinct or separate from one's own reference group.

Group Polarisation

Tendency for group discussion to produce more extreme group decisions than the mean of members’ pre-discussion opinions, in the direction favoured by the mean.