A. One disadvantage to using the multiplier method of valuation is that.

the multiplier method is typically very complex

the multiplier method is too long-term in nature.

multiples are easy to understand

your valuation depends on a correctly valued peer group (which may or may not be accurate)

B. Your company records $1.2 million a year in EBITDA. Comparable companies have been sold recently for multiples averaging 6X EBITDA. Using the multiples method, what is your company worth?

$1.2 million

$7.2 million

No solution

$6 million

C. One advantage to using the multiplier method of valuation is that.

values are based on short-term data

the method is precise, flawless, and thorough

calculations are generally quite simple

values only need to be registered with your state regulatory board, not the SEC