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Basic Question 0 of 5

Which is the most likely a warning sign of dividend sustainability?

A. Dividend coverage ratio: 2.5.
B. FCFE coverage ratio: 1.0.
C. Debt-equity-ratio: 20%.

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Lina

Lina

Learning Outcome Statements

explain the rationale for using price multiples to value equity, how the price to earnings multiple relates to fundamentals, and the use of multiples based on comparables

calculate and interpret the following multiples: price to earnings, price to an estimate of operating cash flow, price to sales, and price to book value

CFA® 2025 Level I Curriculum, Volume 3, Module 8.