$02$:$36$:$27$

These Remainey

$13$

Mateiple Croice $13$ points

$($Lecture B $-$ Stock Valuation$)$

Which of the following statements is FALSE about valuation based on comparable firms?

$$ We can estimate the value of a firm's shares by dividing its current earnings per share by the average P$.$ E ratio of comparable firms.

Authough valuation multiples technique is simple to use, it relies on some very strong assumptions about the simalarity of the comparable firms to the firm you are valuing.

A valuation multiple is a ratio of the value to some measure of the firm's scale. For example, the price$-$earnings $($PD$)$ ratio is a common valuation multiple

None of the above.

$$