Firms with high enterprise value multiples are most apt to have
A)high growth opportunities.
B)low market-to-book ratios.
C)low profit margins.
D)low inventory turnover rates.
E)a low price-earnings ratio.

Question

Quizplus · Accepted Answer

Firms with high enterprise value multiples are more likely to have high growth opportunities, which justify their higher valuations. This is because investors are willing to pay a premium for firms expected to grow at an above-average rate.

Firms with High Enterprise Value Multiples Are Most Apt to Have