What multiple would be used to value an NBFC".

Question

Accepted Answer

The multiple used to value an NBFC depends on various factors such as growth prospects, profitability, and risk profile.

The Price-to-Book (P/B) ratio is commonly used to value NBFCs.
Other multiples such as Price-to-Earnings (P/E) ratio and Price-to-Sales (P/S) ratio can also be used depending on the company's financials and industry.
The multiple used should be compared with peers in the industry to get a better understanding of the company's valuation.
Factors such as asset quality, capital adequacy, and regulatory environment also play a role in determining the multiple used.
For example, a well-established NBFC with a strong track record of profitability and low risk profile may command a higher multiple compared to a new player in the market.

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