Assume that a U.S.-based company has Common Stock, Preferred Stock, Cash, and Debt in its capital structure. It also has on-Balance Sheet Operating Lease Assets and Liabilities.You calculate Current Enterprise Value (TEV) the traditional way, i.e., by starting with Current Equity Value (Eq Val), subtracting Cash, and adding Debt and Preferred Stock.Which of the following valuation multiples is either INVALID or VALID BUT NOT RECOMMENDED for this company? a. (TEV + Operating Lease Liabilities) / EBITDARb. Eq Val / Net Income to Common c. (Eq Val + Preferred Stock) / Net Incomed. TEV / EBITe. Eq Val / Free Cash Flowf. TEV / Unlevered Free Cash Flowg. Eq Val / Common Shareholders’ Equity
Assume that a U.S.-based company has Common Stock,
its capital structure. It also has on-
You calculate Current Enterprise Value (TEV) the traditional way, i.e., by starting with
Current Equity Value (Eq Val), subtracting Cash, and adding Debt and Preferred Stock.
Which of the following valuation multiples is either INVALID or VALID BUT NOT
RECOMMENDED for this company?
a. (TEV + Operating Lease Liabilities) / EBITDAR
b. Eq Val / Net Income to Common
c. (Eq Val + Preferred Stock) / Net Income
d. TEV / EBIT
e. Eq Val / Free Cash Flow
f. TEV / Unlevered Free Cash Flow
g. Eq Val / Common Shareholders’ Equity
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