Question
Which of the following statements is FALSE? If two stocks have the same payout and EPS growth rates as well as equivalent risk, then they
Which of the following statements is FALSE?
| If two stocks have the same payout and EPS growth rates as well as equivalent risk, then they should have the same P/E ratio |
| Looking at enterprise value as a multiple of sales can be useful if it is reasonable to assume that the firms will maintain similar margins in the future. |
| Because capital expenditures can vary substantially from period to period, most practitioners rely on enterprise value to free cash flow multiples |
| Common multiples to consider are enterprise value to EBIT, EBITDA, and free cash flow. |
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