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A potential problem when using EV/EBIT for relative valuation arises because: Group of answer choices Not all firms report EBIT. Interest is a non-capital charge.
A potential problem when using EV/EBIT for relative valuation arises because: Group of answer choices Not all firms report EBIT. Interest is a non-capital charge. Amortization is based on past acquisitions, not future investment, and therefore distorts comparisons. Amortization is typically much less than depreciation
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Financial Theory and Corporate Policy
Authors: Thomas E. Copeland, J. Fred Weston, Kuldeep Shastri
4th edition
321127218, 978-0321179548, 321179544, 978-0321127211
