Series 79 practice questioneasyComparable Company Analysis
Which of the following is a common equity value multiple used in peer valuation?
- AEV/Revenue
- BEV/EBITDA
- CEV/EBIT
- DPrice/Earnings (P/E)✓ Correct answer
Explanation
Why D — Price/Earnings (P/E)
The P/E ratio uses equity value in its numerator, unlike other options which use enterprise value. Confusing equity and enterprise value multiples can lead to valuation errors.
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