Which of the Following Correctly Lists the Conditions When the Multiples

question 17

Multiple Choice

Which of the following correctly lists the conditions when the multiples valuation of a subsidiary is appropriate?

• A)The subsidiary is publicly traded,and the parent owns less than 20 percent of the subsidiary.
• B)The subsidiary is not publicly traded,and the parent owns less than 20 percent of the subsidiary.
• C)The subsidiary is publicly traded,and the parent owns between 20 percent and 50 percent of the subsidiary.
• D)The subsidiary is not publicly traded,and the parent owns between 20 percent and 50 percent of the subsidiary.

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Definitions:

Average Net Fixed Assets

The average value of a company's fixed assets, like property, plant, and equipment, net of depreciation, over a specified period.

Industry Average

A metric that represents the average performance or benchmark for a particular industry or sector.

Financial Ratios

Metrics derived from financial statements that evaluate a company's operational efficiency, liquidity, profitability, and solvency.

Reporting Agencies

Organizations that collect and disseminate information on individuals' or companies' financial and credit history.