As Per the Rev

question 18

Multiple Choice

As per the Rev.Rul.59-60 (Sec.4) ,which of the following factors should be considered in valuations?

• A) the price earnings ratio of the company
• B) the earning capacity of the company
• C) the fair market value of the stock of the business
• D) the book value of stocks of similar companies

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Definitions:

Basalt

A dark, fine-grained volcanic rock formed from the rapid cooling of basaltic lava exposed at or very near the surface of a planet or moon.

Island Arc

A series of volcanic islands shaped in a curve situated along the junction of tectonic plates, usually created over a plate being forced downward.

Hawaiian Islands

An archipelago located in the Pacific Ocean, formed by volcanic activity from a hot spot beneath the Earth’s crust.

Aleutian Islands

a chain of islands located in the Northern Pacific Ocean, forming part of the Alaska state boundary.