An Advantage of the 'Valuation Multiple Method' as Compared to the 'Discounted

question 17

True/False

An advantage of the 'valuation multiple method' as compared to the 'discounted cash flow method' is that it takes into account important differences between different firms.

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Definitions:

Constructive Fraud

A type of fraud established by an abuse of a trust relationship where there was no intent to deceive, but the actions or negligence led to a breach of duty which resulted in harm.

Material Fact

A material fact is a fact that, if known, would influence an individual's decision in a transaction or in a legal case, thereby having a significant impact on the outcome.

Recklessly

Acting with disregard for the safety or consequences of one's actions, often leading to potential harm or risk.

Section 12(a)(2)

A provision under the Securities Act of 1933 that provides a remedy for investors who have been sold securities by means of a prospectus or oral communication containing a material misstatement or omission.