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:

Influencers

Individuals who have the power to affect the purchasing decisions of others because of their authority, knowledge, position, or relationship with their audience.

Lifestream

A digital representation of one's life activities and interests, often compiled through social media posts, blogs, and online interactions.

Digital Identity

The online presence and personal information of an individual or organization across digital platforms and how they are perceived.

Social Footprint

A measure of the impact that a person or organization has on society through their social media presence and activities.