11.10: Multiple Choice
- Page ID
- 94686
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used to calculate a company’s book value
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a multiplier used in enterprise valuation
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only applied when valuing preferred stock
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a metric for showing the expectations of the market
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market-to-book
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enterprise-to-book
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asset-to-price
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liability-to-book
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enterprise value multiples and comparable company value multiples
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equity multiples and enterprise value multiples
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asset value multiples and liability value multiples
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None of the above
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the subject company is operating at a loss
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conducting comparisons between companies in different industries
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conducting comparisons between cash returns and investment types
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analyzing mature companies that have been paying dividends for several years
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share price
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earnings per share
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market value per share
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book value per share
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EV to revenue can be used to assess companies with negative cash flows or firms that are currently experiencing financial losses.
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ROCE is a profitability ratio that measures the return on the equity in a company in comparison to its financing over a short period of time.
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EBIT allows investors to assess the core operations of the business without worrying about the costs of the capital structure.
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EBITDAR is a metric that is used in businesses that have substantial rental and least expenses.
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remain the same
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increase
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decrease
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None of the above
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it is extremely complicated to use
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it cannot be used with companies that do not pay dividends
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it must always be used in conjunction with another metric
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None of the above
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Preferred stock carries voting rights for its ownership.
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Preferred stock must be purchased through a broker dealer.
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Preferred stock may have a cumulative dividend feature.
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In the event of corporate liquidation, preferred stockholders are paid last.
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publicly traded companies always file their financial reports on time
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investors are able to identify underpriced stocks for purchase
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stocks trade with minimal costs and prices are current and fair to all traders
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financial information on companies and their stock is only available to efficient traders