Which One of the Following Equity Valuation Methods Records Surplus

question 3

Multiple Choice

Which one of the following equity valuation methods records surplus cash on the balance sheet but assumes that the surplus cash is paid out over time for valuation purposes?

• A) maximum dividend method
• B) pseudo dividend method
• C) sustainable growth method
• D) return on equity method

---

Definitions:

Tax Rate

How much of an individual's or a business's income is taken as tax by the government.

CCA Class

A classification within the Capital Cost Allowance system in Canada, grouping assets with similar properties for depreciation purposes.

Net Advantage To Leasing

The benefits a company realizes from leasing assets rather than purchasing them, considering cost savings, tax advantages, and flexibility.

Estimated Life

The expected duration or lifespan of an asset, affecting depreciation calculations and investment decisions.