The Use of Unobservable Inputs Such as a Pricing Model

question 94

Multiple Choice

The use of unobservable inputs such as a pricing model or discounted cash flow is an example of a level ________ estimate.

• A) 1
• B) 2
• C) 3
• D) 1 and 3

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Definitions:

Acquisition

The process by which one company purchases most or all of another company's shares to gain control of that company.

Outstanding Stock

Refers to the total number of shares of a company that are currently owned by investors, including shares held by institutional investors and restricted shares held by insiders and company officers.

Strategic Fit

Alignment between an organization's strategies, capabilities, and the external environment, aiming to achieve competitive advantage.

Discounted Cash Flow

A valuation method used to estimate the attractiveness of an investment opportunity, accounting for the time value of money.