Which of the Following Statements Is FALSE

question 42

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)Using a valuation multiple based on comparables is best viewed as a 'shortcut' to the discounted cash flow method of valuation.
• D)It is common practice to use valuation multiples based on the firm's enterprise value.

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Definitions:

In-place Fallback

A strategy for recovering from a failed update or process change by reverting to the previous state without major system disruptions.

Transmission Stuck

A condition where a vehicle's transmission fails to shift gears properly, often due to mechanical problems or lack of fluid.

Neutral

In automotive terms, a gear position in transmission that disengages the engine from the wheels, allowing the vehicle to coast without power input.

Hall-effect Sensors

Devices that detect magnetic fields and convert the information into electrical signals.