Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Your investor client is seeking your advice on some of the market ratios she has come across: P/E, Price/Sales, EV/EBIDA, EV/EBIT. Which of her understanding

Your investor client is seeking your advice on some of the market ratios she has come across: P/E, Price/Sales, EV/EBIDA, EV/EBIT. Which of her understanding is correct:

a.

EV ratios can be more suitable than PE ratios

b.

These ratios have positive values as you get your share price by using them as multiples.

c.

PE is the most used ratio because it can be used among all firms with different leverage.

d.

You will get exactly the same stock price no matter which ratio you are using

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Short Term Financial Management

Authors: John Zietlow, Matthew Hill, Terry Maness

5th Edition

1516512405, 9781516512409

More Books

Students also viewed these Finance questions