Which One of the Following Equity Valuation Methods Records Surplus

question 3

Multiple Choice

Which one of the following equity valuation methods records surplus cash on the balance sheet but assumes that the surplus cash is paid out over time for valuation purposes?

• A) maximum dividend method
• B) pseudo dividend method
• C) sustainable growth method
• D) return on equity method

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Definitions:

Fibrous Capsule

A dense connective tissue layer that encloses certain organs and joints, providing support and protection.

Synovial Joint

A freely movable joint characterized by a cavity filled with synovial fluid, which lubricates and nourishes the cartilage-covered articulating surfaces.

Articular Cartilage

A smooth, white tissue that covers the ends of bones at joints, enabling easy movement and reducing friction.

Synovial Fluid

A viscous, non-Newtonian fluid found in the cavities of synovial joints, reducing friction between articular cartilages during movement.