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

question 31

Multiple Choice

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

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

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Definitions:

Teleconferencing

A communication method that allows multiple participants to hold meetings or discussions remotely over telephone or internet connections.

Oral Medium

A communication channel that employs spoken language to convey messages.

Minimize Distortion

Efforts to reduce misinterpretation or alteration of information as it is communicated or transferred from one source to another.

Oral from Person

Communication or information transmitted directly through spoken word from one individual to another.