Which of the Following Can Be a Potential Problem When

question 56

Multiple Choice

Which of the following can be a potential problem when using comparables to value a firm?

• A)estimating a good opportunity cost of capital to use
• B)identifying a good value-relevant attribute
• C)finding similar firms
• D)Both B and C are correct.

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Definitions:

Revenue Recognition

Refers to the criteria or guidelines used by a company to recognize revenue in its financial statements, ensuring revenue is recorded when earned.

Criterion

A principle or standard by which something may be judged or decided.

Farming

The practice of cultivating land, raising crops, and/or keeping animals to produce food and other agricultural products.

Mining

The extraction of valuable minerals or other geological materials from the Earth, often from an ore body, lode, vein, seam, or reef.