When Property Insurers Offer Coverage on This Basis, They Do

question 4

Multiple Choice

When property insurers offer coverage on this basis, they do not deduct depreciation in valuing the loss.This is the value of the lost or destroyed property if it were bought new or rebuilt on the day of the loss.Identify this basis for valuation for property coverage.

• A)Fair market value
• B)Actual cash value
• C)Real cost value
• D)Intrinsic value
• E)Replacement cost new

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Definitions:

Restriction/Appropriation

The limitation of retained earnings distribution specified by management or shareholders, often for specific purposes like future investments or debt repayment.

Stockholders' Equity

Refers to the residual interest in the assets of a corporation that remains after deducting its liabilities, representing ownership interest in the company.

Par Common Stock

Common stock issued with a nominal value per share, which represents the minimum legal capital that must be paid per share.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing the ownership interest of shareholders.