How Does a Firm Determine Its Enterprise Value

question 29

Multiple Choice

How does a firm determine its enterprise value?

• A)price per share of its stock × the common shares outstanding.
• B)sales × (1 + growth rate in sales)
• C)EBIT × (1 - tax rate)
• D)Net Income + depreciation

---

Definitions:

Interquartile Range

Provides the range of the middle 50% of scores around the median. Because it eliminates the top and bottom quartiles, the quartile range is most useful with skewed curves because it offers a more representative picture of where a large percentage of the scores fall.

Internal Consistency

A method of determining reliability of an instrument by looking within the test itself, or not going “outside of the test” to determine a reliability estimate as is done with test-retest or parallel forms reliability. Some types of internal consistency reliability include split-half (or odd-even), Cronbach’s Coefficient Alpha, and Kuder-Richardson.

Licensure Exam

A standardized test that individuals must pass to obtain a license to practice in certain professions, ensuring they meet the required competency standards.

Median

The middle value in a data set when the values are arranged in ascending or descending order.