Which of the Following Statements Is FALSE

question 10

Multiple Choice

Which of the following statements is FALSE?

• A)Because the enterprise value represents the entire value of the 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 the 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:

National Front

A political party or movement in various countries, often characterized by its nationalist, xenophobic, or far-right ideologies.

Algerian War

A conflict between France and the Algerian National Liberation Front from 1954 to 1962, leading to Algeria gaining its independence from France.

Common Currency

A common currency refers to a monetary system in which multiple countries or territories use the same currency, facilitating trade and economic policy coordination.

Nationalist Party

A political party that aims to promote the interests of a particular nation or group of people, especially in terms of self-governance and sovereignty.