Question #49
Reading: Reading 22 Market-Based Valuation - Price and Enterprise Value Multiples
PDF File: Reading 22 Market-Based Valuation - Price and Enterprise Value Multiples.pdf
Page: 17
Status: Incorrect
Correct Answer: A
Your Answer: C
Question
A justified price multiple is the:
Answer Choices:
A. multiple implied by the market price
B. multiple implied by historical growth
C. warranted or intrinsic price multiple
Explanation
A justified price multiple is the warranted or intrinsic price multiple. It is the estimated fair
value of that multiple.