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yuknam yuknam
wrote...
Posts: 357
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3 months ago
Which of the following statements concerning the valuation of firms using the method of comparables is FALSE?

▸ If two different firms generate identical cash flows, the Law of One Price will imply that both firms have the same value.

▸ Two firms that sell very similar products or offer very similar services will have different values if they are of different sizes.

▸ Comparables adjust for scale differences when valuing similar firms.

▸ Valuation multiples take into account differences in the risk and future growth between the firms being compared.
Textbook 

Fundamentals of Corporate Finance


Edition: 2nd
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wrote...
3 months ago
Valuation multiples take into account differences in the risk and future growth between the firms being compared.
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