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When using FCF/share in order to value a stock, how do I determine the proper multiple? Thank you.?

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  • When using FCF/share in order to value a stock, how do I determine the proper multiple? Thank you.?


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Answer #1 | 20/12 2013 15:55
'Free Cash Flow Per Share' is a measure of a company's financial flexibility that is determined by dividing free cash flow by the total number of shares outstanding. This measure serves as a proxy for measuring changes in earnings per share. It is NOT the same as the P/E ratio which is determined by dividing the market capitalization (market price/share times total number of shares outstanding) by the net income. http://www.investopedia.com/terms/f/freecashflowper share.asp
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