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Basic Question 4 of 4
A justified price multiple is the estimated fair value based on:
B. the method of forecasted fundamentals only.
C. either the method of comparables or the method of forecasted fundamentals.
A. the method of comparables only.
B. the method of forecasted fundamentals only.
C. either the method of comparables or the method of forecasted fundamentals.
User Contributed Comments 1
| User | Comment |
|---|---|
| Inaganti6 | trailing vs leading |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
contrast the method of comparables and the method based on forecasted fundamentals as approaches to using price multiples in valuation, and explain economic rationales for each approach;
calculate and interpret a justified price multiple;
describe rationales for and possible drawbacks to using alternative price multiples and dividend yield in valuation;
CFA® 2025 Level II Curriculum, Volume 4, Module 23.