The approach to valuing an entity or the equity of an entity by applying the market multiples of comparable companies is best described as the:

Question

Quizplus · Accepted Answer

The method of multiples involves valuing an entity by applying the market multiples (such as P/E, EV/EBITDA) of comparable companies to the entity being valued. This approach is commonly used in equity valuation and mergers and acquisitions.

The Approach to Valuing an Entity or the Equity of an Entity