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:

Glass Ceiling

Attitudinal and organizational workplace obstacles that prevent women from advancing to leadership positions.

Organizational Biases

Prejudices or systematic tendencies within an organization that influence its decisions and behaviors, often leading to unfair outcomes.

Working Mothers

Women who maintain a job or career while simultaneously fulfilling the responsibilities of motherhood.

Child Care

The supervision and care provided to children, typically ranging in ages from infancy to adolescence, by individuals other than their legal guardians.