Question: True or False - The formula for the Exit Multiple Method is the target firms key performance variable divided by the Exit Multiple. - The
True or False
- The formula for the Exit Multiple Method is the target firms key performance variable divided by the Exit Multiple.
- The foundation for Market Comparables is built on the premise that similar companies provide a highly relevant reference point for valuing a given target firm due to the fact that they share key business and financial characteristics, performance drivers, and risks.
- The Market Comparable analysis is usually conducted with actual financial statements and other performance variables, however, this same analysis is often times used with forecasted measures as well.
- The most important factor in a quality forecast is that the forecast reflect observed historical relationships.
- The Perpetuity Growth Method is used to assess a firms continuing value by forecasting the post-planning periods Equity Free Cash Flow and dividing that value by the weighted average cost of capital minus the growth rate.
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