asked 216k views
3 votes
Valuation using market multiples is popular because it simply multiplies a market multiple by what variable to determine value?

asked
User Johnfo
by
7.3k points

1 Answer

2 votes

Answer:

The multiples approach is a valuation theory based on the idea that similar assets sell at similar prices. It assumes that a ratio comparing value to a firm-specific variable like Price/Earnings (P/E),Price/Sales (P/S),Price/Book Value (P/BV) etc.

Step-by-step explanation:

The variable to determine value will change according to the industry.

answered
User PolinaC
by
7.7k points
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