One cannot mix-match the numerator with denominator

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Reference no: EM131187917

One of the principles of using multiples correctly is that one cannot mix-match the numerator with denominator. Both should correspond to the same group of claimholders. Which multiple below is a CORRECT example of following this principle?

a. Market value of equity/free cash flow to the firm

b. Enterprise value/net income

c. Market value of the firm/free cash flow to the equity holders

d. Market value of equity/book value of equity

Reference no: EM131187917

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