FUND.OF FINANCIAL MGMT:CONCISE-MINDTAP
FUND.OF FINANCIAL MGMT:CONCISE-MINDTAP
10th Edition
ISBN: 9781337910972
Author: Brigham
Publisher: CENGAGE L
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Chapter 9, Problem 7Q
Summary Introduction

To explain: The P/E multiple and EVA approach and their use to value a common stock.

Introduction:

P/E Multiple: The term used for price/earnings multiple reflects the market price of a stock as the times of earnings per share of that company. It determines the investors’ willingness towards the current market price of the stock.

Economic Value Added (EVA): It is a measure to evaluate a company’s stock based on the economic value it has added at a specified time. It considers the opportunity costs of capital invested in the business and the net operating profit generated by the business.

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FUND.OF FINANCIAL MGMT:CONCISE-MINDTAP

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