Discounted Earnings Method Is

question 7

Multiple Choice

Discounted earnings method is:

• A)a method of determining the true value of the firm using a pricing formula that includes earning power and adjusted tangible book value
• B)a method of determining the true value of the firm using a cost of goods formula including earning power and adjustable tangible book value
• C)a method of determining the true value of the firm using financial ratios and adjustable tangible book value
• D)None of these choices

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Definitions:

Personality Test

A questionnaire or other standardized instrument designed to reveal aspects of an individual's character or psychological makeup.

Established Standards

Officially recognized criteria or benchmarks that are widely accepted and used as a basis for comparison or judgment.

Criterion Validity

The extent to which a measure is related to an outcome or, more specifically, the effectiveness of a test in predicting an individual's behavior in specific contexts.

Psychological Test

A standardized measure of a sample of a person's behavior or mental processes.