ASA BV Challenge Exam Practice Questions - ASA Business Valuation Challenge Exam

When pairing a valuation multiple with a financial metric, which combination is internally consistent?

Price/Earnings using MVIC as the numerator MVIC/EBITDA where EBITDA is earnings before interest, taxes, depreciation, and amortization Price/Sales using invested capital sales net of debt service Equity value divided by total invested-capital revenue

Correct Answer:

MVIC/EBITDA where EBITDA is earnings before interest, taxes, depreciation, and amortization

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