Which of the Following Is Not a Factor That Makes

question 183

Multiple Choice

Which of the following is not a factor that makes valuing a target's stock difficult and imprecise?

• A)It's hard for an acquirer to get an accurate forecast of the target's future cash flows.
• B)Terminal values vary dramatically in response to small changes in assumptions.
• C)The acquirer's management generally doesn't know anything about the target's line of business.
• D)Estimating a risk adjusted discount rate for the analysis is inherently imprecise.

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Definitions:

Assets

Resources or items of value owned by an individual, company, or organization, which can be used to meet debts, commitments, or legacies.

Charge Slip

A document used in medical billing that captures the services provided to a patient and is used to generate a claim for insurance purposes.

Debit

An entry recording an amount owed, typically representing the increase in assets or decrease in liabilities of an account in accounting.

Credit

A payment subtracted from existing balance.