7. Among the following statements about valuation multiple, only 3 are correct. Identify which ones. a) ...
7. Among the following statements about valuation multiple, only 3 are correct. Identify which ones.
a) The price earnings ratio analysis compares the enterprise value of a company to its EBITDA
b) The price earnings ratio analysis compares the enterprise value of a company to its net income
c) The price earnings ratio analysis compares the market value of equity of a company to its net income
d) The price earnings ratio analysis compares the share price to the earnings per share
e) The price earnings ratio analysis provides an indication as to the expected growth in earnings per share
Homework Answers
The correct ones are:
c) The price earnings ratio analysis compares the market value of equity of a company to its net income
d) The price earnings ratio analysis compares the share price to the earnings per share
e) The price earnings ratio analysis provides an indication as to the expected growth in earnings per share
Price Earnings ratio = Price/Earnings Or total market value of equity/Net income
Higher the ratio, higher the growth
Add Answer to:
7. Among the following statements about valuation multiple, only
3 are correct. Identify which ones.
a) ...
4. Among the following statements, only 3 are correct. Identify which ones. a) The market value...
4. Among the following statements, only 3 are correct. Identify which ones. a) The market value of a company depends on its past earnings b) Growth in future earnings has an impact on the value of a company's stock c) Investors are more focused on cash flows than profit when valuing a company's stock d) Qualitative factors may impact the value of a company's stock e) The DCF valuation methodology relies on cash flow forecasts
1. Among the following statements, only 3 are correct with respect to corporate valuations. Identify which...
1. Among the following statements, only 3 are correct with respect to corporate valuations. Identify which ones. a) There are several potential values for a single company b) Valuation combines business and financial analysis, as well as the use of valuation methodologies c) The value of a company with stable earnings does not change over time d) Valuation is only based on future earnings projections, one does not take into account current or historical performance at all unanswered
QUESTION 2 Partially correct Marked out of 1.00 Rag question Valuation Using the PE Multiple The ...
(Module 15 Question 2) Please answer all questions with a red X
next to them. Thank you!
QUESTION 2 Partially correct Marked out of 1.00 Rag question Valuation Using the PE Multiple The following table provides summary data for Applied Materials Inc. and its competitors, KLA Tencor Corporation and Lam Research Corporation. in millions) Company assumed value Equity assumed value NOPAT Net income Nec nonoperating obligations fassels Common shares outsianding Applied Materials 1,444 $1,377 $(1,369) 1,160.0 KLA Tencor $10,000 $9,197...
Received b c and e as answers but this is incorrect 4. Among the following statements,...
Received b c and e as answers but this is incorrect 4. Among the following statements, only 3 are correct. Identify which ones. a) The market value of a company depends on its past earnings b) Growth in future earnings has an impact on the value of a company's stock c) Investors are more focused on cash flows than profit when valuing a company's stock d) Qualitative factors may impact the value of a company's stock e) The DCF valuation...
Which of the following is NOT a true statement about Price to Earnings ratios? P/E ratios...
Which of the following is NOT a true statement about Price to Earnings ratios? P/E ratios are useful for comparing companies in the same sector. P/E compares a company's market valuation with the income it is actually generating. Stocks with higher forecast earnings growth will usually have a lower P/E. With trailing P/E, the earnings per share is based on the most recent 12 month period. Which of the following is a true statement about using Return on Equity (ROE)...
This Question: 10 pts 4 of 44 (3 complete) Which of the following statements about financial...
This Question: 10 pts 4 of 44 (3 complete) Which of the following statements about financial ratios is FALSE? O A. When calculating the price - earnings ratio, preferred dividends are subtracted from market price per share. OB. When calculating return on assets, preferred dividends are subtracted from net income. OC. When calculating return on equity, preferred dividends are subtracted from net income OD. When calculating earnings per share, preferred dividends are subtracted from net income.
Two companies.. Intel and Advanced Micro Devices (ADM). GO pull their financial statements and lets talk...
Two companies.. Intel and Advanced Micro Devices (ADM). GO pull their financial statements and lets talk about the following ratios.. I want you to do ONE Ratio, and explain what it means between the two companies (and show the calc and your work).. For each of the four years of statements, compute the following ratios for each firm: Valuation Ratios Price-Earnings Ratio (for EPS use Diluted EPS Total) Market-to-Book Ratio Enterprise Value-to-EBITDA (For debt, include long-term and short-term debt; for...
3. What are the key limitations of the comparable companies valuation methodology? Be specific. 4. In...
3. What are the key limitations of the comparable companies
valuation methodology? Be specific.
4. In estimating the value of anticipated cost savings, should
an analyst use St. Jude’s marginal tax rate of 40% or its effective
tax rate of 22%? Explain your answer.
5. What is the PV of the $500-million pretax annual cost savings
expected to start in 2020? Assume the appropriate cost of capital
is 10% and that the savings will continue in perpetuity. Show your
work....
11. The following about the price earnings ratio (P/E) is/are correct except: (2 marks) a. It...
11. The following about the price earnings ratio (P/E) is/are correct except: (2 marks) a. It is computed by multiplying the market price of the share by its earnings per share. b. PE ratio is used to discuss the investment possibility of a given enterprise C. The greater the P/E ratio, the better the perception of investors regarding the future growth of the firm. d. If a company's P/E ratio drops steadily this indicates that investors are confident of the...
What is the valuation using the EBITDA Multiple Method? U LILLIPICS T Jou equity valuation 300...
What is the valuation using the EBITDA Multiple Method?
U LILLIPICS T Jou equity valuation 300 - Equity Valuation Exercise s Enterprises (ticker: BE) is engaged in the business of making athletic shoes a. It pays a dividend of $150 per quarter, some people believe it will stay the same and others believe it will grow by 49 per year. b. Other shoe manufacturers trade in the market for 8.0x EBITDA. c. Other similar companies also trade with a PE...
(Module 15 Question 2) Please answer all questions with a red X
next to them. Thank you!
QUESTION 2 Partially correct Marked out of 1.00 Rag question Valuation Using the PE Multiple The following table provides summary data for Applied Materials Inc. and its competitors, KLA Tencor Corporation and Lam Research Corporation. in millions) Company assumed value Equity assumed value NOPAT Net income Nec nonoperating obligations fassels Common shares outsianding Applied Materials 1,444 $1,377 $(1,369) 1,160.0 KLA Tencor $10,000 $9,197...
This Question: 10 pts 4 of 44 (3 complete) Which of the following statements about financial ratios is FALSE? O A. When calculating the price - earnings ratio, preferred dividends are subtracted from market price per share. OB. When calculating return on assets, preferred dividends are subtracted from net income. OC. When calculating return on equity, preferred dividends are subtracted from net income OD. When calculating earnings per share, preferred dividends are subtracted from net income.
3. What are the key limitations of the comparable companies
valuation methodology? Be specific.
4. In estimating the value of anticipated cost savings, should
an analyst use St. Jude’s marginal tax rate of 40% or its effective
tax rate of 22%? Explain your answer.
5. What is the PV of the $500-million pretax annual cost savings
expected to start in 2020? Assume the appropriate cost of capital
is 10% and that the savings will continue in perpetuity. Show your
work....
11. The following about the price earnings ratio (P/E) is/are correct except: (2 marks) a. It is computed by multiplying the market price of the share by its earnings per share. b. PE ratio is used to discuss the investment possibility of a given enterprise C. The greater the P/E ratio, the better the perception of investors regarding the future growth of the firm. d. If a company's P/E ratio drops steadily this indicates that investors are confident of the...
What is the valuation using the EBITDA Multiple Method?
U LILLIPICS T Jou equity valuation 300 - Equity Valuation Exercise s Enterprises (ticker: BE) is engaged in the business of making athletic shoes a. It pays a dividend of $150 per quarter, some people believe it will stay the same and others believe it will grow by 49 per year. b. Other shoe manufacturers trade in the market for 8.0x EBITDA. c. Other similar companies also trade with a PE...
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