Which of the Following Statements Is FALSE

question 13

Multiple Choice

Which of the following statements is FALSE?

• A)Because capital expenditures can vary substantially from period to period,most practitioners rely on enterprise value to free cash flow multiples.
• B)Common multiples to consider are enterprise value to EBIT,EBITDA,and free cash flow.
• C)If two stocks have the same payout and EPS growth rates as well as equivalent risk,then they should have the same P/E ratio.
• D)Looking at enterprise value as a multiple of sales can be useful if it is reasonable to assume that the firms will maintain similar margins in the future.

---

Definitions:

Labor Shortages

A situation where the demand for workers exceeds the supply in a particular market or industry.

Surpluses

Instances in which supply exceeds demand, resulting in excess goods, services, or resources.

Natural Attrition

The reduction in workforce due to employees leaving naturally through retirement, resignation, or death, rather than through layoffs.

Early Retirement

An option allowing individuals to retire before the traditional retirement age, often with specific pension or benefits arrangements.