Multiple Choice
Which of the following are reasons that the value-to-EBITA ratio is superior to the price-to-earnings ratio as a multiple to aid in valuation?
I.The P/E is distorted by capital structure.
II.The P/E is distorted by inflation.
III.The P/E is distorted by nonoperating gains and losses.
IV.The P/E is distorted by dividend payouts.
A) I and III only.
B) II and III only.
C) II and IV only.
D) I,III,and IV only.
Correct Answer:
Verified
Correct Answer:
Verified
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