Explain mcdonalds much higher ev-sales multiple

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Reference no: EM133610544

Assignment:

In March 2023, McDonald's had an Enterprise Value/Sales multiple of 10.0x, whereas many of its peers had an EV/Sales multiple between 2.5x and 5.5x, with a median of 3.7x. What might best explain McDonald's much higher EV/Sales multiple?

- McDonald's stock is extremely overvalued, and the stock price is likely to collapse soon.
- McDonald's is likely to grow much faster than almost all other fast food chains.
- McDonald's has higher margins than almost all of its peers.
- McDonald's has a much lower cost of capital than almost all of its peers.

Reference no: EM133610544

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