Which of the Following Are Desirable Characteristics of Targets

question 10

Multiple Choice

Which of the following are desirable characteristics of targets?

• A)Rapidly growing cash flows and earnings
• B)Low P/E ratios
• C)Market value less than book value
• D)All of the above
• True or False

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Definitions:

Partnership Capital

The amount of capital that is contributed by the partners in a partnership firm, representing their ownership interest and basis for sharing profits and losses.

Income-sharing Ratio

A predefined formula used to distribute profits among partners or stakeholders in proportion to their agreed-upon shares.

Bonus Method

An accounting method for handling goodwill or the excess amount paid over the book value in a transaction, often used in partnership accounts.