Determine the Market Value of a "Comparable" Firm Based on the Following

question 3

Multiple Choice

Determine the market value of a "comparable" firm based on the following information: value of target firm = $4,000,000; net income of target firm = $200,000; and net income of "comparable" firm = $500,000.

• A) $4 million
• B) $7.5 million
• C) $10 million
• D) $12.5 million
• E) $15 million

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Definitions:

Overestimate

To estimate something to be greater, larger, or more important than it actually is.

Self-Actualization

The realization of one's potential and the development of self-awareness and personal growth.

Unconditional Positive Regard

An attitude of total acceptance and support towards another person, regardless of what they say or do, often considered important in therapeutic settings.

Empathy

The ability to understand and share the feelings of another person from their point of view.