Valuation using market multiples captures:
A) absolute valuation per dollar of book value or per dollar of earnings.
B) dollar of book value or dollar of earnings per dollar of common equity.
C) relative valuation per dollar of book value or per dollar of earnings.
D) intrinsic valuation per dollar of book value or per dollar of earnings.

Question

Quizplus · Accepted Answer

Market multiples are used to carry out relative valuation, where a company's value is compared to the values of similar companies in the same industry. Market multiples compare a financial ratio or stock price of a company to those of its peers. Therefore, valuation using market multiples captures relative valuation per dollar of book value or per dollar of earnings.

Valuation Using Market Multiples Captures