Which statement best describes comparables analysis and its use in valuation?

Which statement best describes comparables analysis and its use in valuation?

• A. Net present value of projected cash flows is used in comparables analysis
• B. Valuation using multiples (EV/EBITDA, P/E) from similar companies to estimate target value
• C. Assessing management quality relative to industry peers
• D. Weighted average cost of capital is the only input for comparables

Answer: (B)