Question

In: Finance

For what company would a valuation metric like EV/Sales be helpful? a. A company with high...

For what company would a valuation metric like EV/Sales be helpful?

a.

A company with high gross margins

b.

A company with no earnings

c.

A company with low gross margins

d.

A company with no debt

Solutions

Expert Solution

Option b is correct option. A valuation metric like EV/Sales should be used to value companies with no earnings since cash flows are not there to calculate the value through other methods


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