Name the Ways of Valuing a Business and Explain Why

question 29

Essay

Name the ways of valuing a business and explain why none of them can be called ideal.

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Definitions:

Consumer Surplus

The divergence in total intended consumer expenditure on a product or service and the total actual expenditure.

Market Power

The ability of a company or entity to influence or control the terms and conditions of the market to some degree, affecting prices and competition.

Externalities

Financial consequences for unrelated third parties, which can manifest as either positive or negative effects.

Perfectly Competitive

Describes a market structure where many firms sell identical products, there are no barriers to entry, and no single buyer or seller can influence the market price.