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PE multiplier valuation arrives at value per share by multiplying:
ADividend by a perpetual growth rate
BBook value by an industry PB ratio
CRevenue by a profit margin assumption
DEPS by a benchmark or industry PE ratio
Answer & Solution
Correct answer: D. EPS by a benchmark or industry PE ratio
1. Identify what the question asks: this concept maps to pemultiplier (§3.2.1).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (D).
_Source: ICAI BoS CA Final Paper 2, Ch 13 "Business Valuation"_
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