Busıness Fınance Iı Deneme Sınavı Sorusu #1024276

Which of the following is true for "Price to Cash Flow Ratio"?

It shows how much investors are willing to pay in exchange of one unit of earnings per share (EPS)

It is convenient for both public and non-public companies

It analyses relationship between cash flows and market price

It is another widely used methodology to value target firms in M&As

It assumes that the average Price/Book value ratio of industry/market is a good representative of a company’s same ratio.

Yanıt Açıklaması:

Price to cash flow ratio analyses relationship between cash flows and market price. This approach suggests using cash flows instead of earnings because companies may use different depreciation techniques. Cash flow is calculated as net income plus depreciation.

PAYLAŞ:

SORUNUN CEVABI: C

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