Question 3

Some commonly used multiple metrics are:

• P/E (price-to-earnings)
• PEG (price/earnings to growth)
• Price/Cash Flow (value of stock price relative to cash flow)
• Price/Book Value or P/B Ratio (the ratio of share market value to its equity book value)
• EV/EBIT (enterprise value to earnings before interest and tax)
• EV/EBITDA (enterprise value to earnings before interest, tax, depreciation and amortization)
• EV/Sales (how much enterprise value is generated by sales)

True

False