Which of the Following Statements Is FALSE

question 33

Multiple Choice

Which of the following statements is FALSE?

• A) As the enterprise value represents the entire value of a 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 a 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:

Sonogram

A procedure for using ultrasonic sound waves to create a picture of an embryo or fetus.

Ultrasound

A medical imaging technique that uses high-frequency sound waves to create images of structures within the body, commonly used during pregnancy.

Fetoscopy

Fetoscopy is a diagnostic medical procedure that involves inserting a small scope into the uterus to observe a fetus directly for the purposes of diagnosis or therapy.

Klinefelter Syndrome

A genetic condition affecting males, characterized by an extra X chromosome, which can lead to physical, developmental, and reproductive issues.