All of the Following Are True for Market Based Valuation

question 88

Multiple Choice

All of the following are true for market based valuation methods except for which of the following?

• A) Assumes that markets are efficient such that current values reflect all the information currently known about the business
• B) Current values represent what a willing buyer and seller are willing to pay for a business in the absence of full information
• C) Market based methods are always superior to discounted cash flow techniques
• D) Include comparable company and recent transactions methods
• E) Include the tangible book value approach

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Definitions:

Corporations

Legal entities that are separate and distinct from their owners, with the rights to own property, sue or be sued, and conduct business.

States

Defined territorial areas within a country, each with its own government and regulatory powers.

Corporation

A legal entity that is separate and distinct from its owners, who are shareholders; it has rights, privileges, and liabilities independent of those of its members.

Owners

Individuals or entities that legally possess, control, and derive benefits from property or a business.