Question #83
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: 30
Status: Unattempted
Question
Which of the following price multiples is most severely damaged by international accounting differences?
Answer Choices:
A. Price to free cash flow to equity (P/FCFE)
B. Price to cash flow from operations (P/CFO)
C. Enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA)
Explanation
EV/EBITDA is the most seriously affect because it is most closely tied to accounting
conventions.