Which of the following is NOT an advantage of the EV/EBITDA valuation approach over the price-earnings approach?

A) Because the EV/EBITDA approach is more of a cash flow-oriented method, there is less room for accounting discretion.
B) Because EBITDA is measured before interest and depreciation expenses are deducted, this method MAXIMIZES potential distortions from capital structure differences
C) Because EBITDA is measured before interest and depreciation expenses are deducted, this method minimizes potential distortions from from fixed asset differences across firms when performing comparable analysis.
D) All of the above are advantages, not disadvantages for the EV/EBITDA approach.


B

Business

You might also like to view...

Explain why nonverbal behavior seems to carry more “value” in a message than verbal communication.

What will be an ideal response?

Business

Which type of control is considered a compensating control?

a. segregation of duties b. access control c. supervision d. accounting records

Business

An investor purchased $50,000 of 10-year bonds it intends to hold to maturity. The investor's journal entry to record the purchase is a debit to Debt Investments-HTM for $50,000 and a credit to Cash for $50,000.

Answer the following statement true (T) or false (F)

Business

Questions concerning trade union membership are prohibited during the job hiring process by which legislation?

A) Charter of Rights and Freedoms B) Labour legislation C) Provincial human rights legislation D) Federal human rights legislation E) Both B and D

Business