An Advantage of the Book Value of Equity Plus Adjustments

question 6

Multiple Choice

An advantage of the book value of equity plus adjustments approach is:

• A)that it implicitly assumes that a firm is going to be shut down.
• B)it doesn't consider the firm being valued as an ongoing concern.
• C)we can immediately "plug in" the starting point of the book value of equity without having to do any calculations.
• D)All of the above.

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Definitions:

Repression

A psychological defense mechanism where unsettling thoughts, memories, or desires are unconsciously pushed from the conscious mind.

Fundamental

Fundamental refers to serving as an essential component or basis for something, being of central importance.

Defence Mechanism

Psychological strategies brought into play by the unconscious mind to manipulate, deny, or distort reality in order to defend against feelings of anxiety and unacceptable impulses.

Displacement

A psychological defense mechanism where an individual shifts emotions from one object or idea to another, often less threatening, target.