The Existence of Goodwill on a Corporate Balance Sheet Indicates

question 42

Multiple Choice

The existence of goodwill on a corporate balance sheet indicates that the corporation has:

• A) been profitable in the past.
• B) depreciated its tangible assets.
• C) intangible assets from past acquisitions.
• D) retained earnings resulting from past income.

---

Definitions:

Risk-Free Rate

The theoretical rate of return of an investment with no risk of financial loss, typically represented by the yield on government bonds.

Expected Return

Expected return is the average amount of profit or loss an investment is projected to generate, based on historical data or statistical analysis.

Beta

An evaluation of how a security or a portfolio's risk level and volatility compare with those of the overall market.

PVGO

Present Value of Growth Opportunities (PVGO) refers to the component of a company's stock price that is attributed to future investments' expected net present value.