When Performing Comparable Analysis the Ideal Comparable Firm Will Have

question 40

Multiple Choice

When performing comparable analysis the ideal comparable firm will have each of the following characteristics EXCEPT:

• A)it is in a similar industry.
• B)it is of a similar size.
• C)it has similar risk as measured by beta.
• D)these are all desirable comparables.

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Definitions:

Frank Knight

An influential economist known for his work on risk, uncertainty, and the role of entrepreneurship in economic theory.

Joseph Schumpeter

An Austrian economist and political scientist known for his theories on business cycles and innovation. He introduced the concept of creative destruction, which describes how old industries are destroyed and replaced by new ones.

Karl Marx

A 19th-century philosopher, economist, and political theorist known for his critical theories about capitalism and advocacy for socialism.

Marginal Revenue Product

The Marginal Revenue Product indicates the additional revenue generated from employing one more unit of a resource, such as labor or capital.