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:

Credit Reports

Documents compiled by credit bureaus detailing an individual's credit history, including loans, repayments, late payments, and bankruptcy records, used by lenders to assess creditworthiness.

Natural Person

A living human individual recognized by law as having rights and obligations, as opposed to a legal entity like a corporation.

Limited Partnerships

A form of partnership consisting of one or more general partners, who manage the business and are personally liable for its debts, and one or more limited partners, who contribute capital and share profits but take no part in running the business and incur no liability beyond their investment.

Good-faith Effort

An honest attempt or endeavor made in a sincere and honest effort, without intent to defraud or seek unfair advantage.