Which of the Following Is the Best Approach to Determine

question 33

Multiple Choice

Which of the following is the best approach to determine the fair value of the non-controlling interest under the fair value enterprise method?

• A) If a control premium is unlikely, use an implied value based on the consideration paid by the parent
• B) Use the market value of the outstanding subsidiary shares (not owned by the parent).
• C) Use a valuation model based on the subsidiary's discounted cash flows.
• D) Use the share price paid by the parent.

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Definitions:

Valid Inference

A logical conclusion drawn from premises known or assumed to be true.

Ominous Results

Findings or outcomes that are perceived as threatening or indicative of future negative events.

Reason with Certainty

The process of drawing conclusions or making determinations based on clear, indisputable evidence or principles.

Applying a Generalization

The process of applying a broad principle or rule to specific instances or situations.