Definition for : Equity capital multiples
Equity capital multiples, i.e. the multiples expressing the Value of equity capital, are multiples of operating balances after Interest expense, principally Net income (P/E multiple), as well as multiples of Cash flow and multiples of underlying Income, i.e. before Exceptional items. Most commonly used equity capital multiples are price-to-Book ratio, the Cash flow multiple and the P/E multiple (see P/E ratio).
(See Chapter 32 Capital structure and the theory of perfect capital markets of the Vernimmen)
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