Which of the Following Is a Good Ballpark Floor Valuation

question 1

Multiple Choice

Which of the following is a good ballpark floor valuation for a business?

• A)Taking the earnings (net profit)of the organization and dividing that figure by a capitalization rate
• B)Estimating cash flows five years into the future and adding a salvage value for the firm
• C)Locating the price/earnings (P/E)ratio for public companies in the same industry
• D)Examining similar companies that have been acquired by looking at the percentage premium being offered in general on all new public acquisitions

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Definitions:

Biological Maturation

The natural process of physical and psychological growth and development, governed by genetic and environmental factors.

Storm And Stress

A term used to describe the tumultuous period of adolescence marked by conflicts with parents, mood disruptions, and risk behaviors.

Freud

Sigmund Freud was an Austrian neurologist who founded psychoanalysis, a clinical method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Hall

G. Stanley Hall, an American psychologist and educator who is considered one of the founding figures of child psychology and educational psychology.