Common Measures of Value Are

question 17

Multiple Choice

Common measures of value are:
I. low P/E ratio
II. low price-to-book ratio
III. high dividend yield
IV. high EPS rate growth

• A) I, II and III
• B) I, III, and IV
• C) II and III
• D) I, II, III, and IV

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Definitions:

Partial Equity Method

An accounting technique used when an investing company does not have significant influence over the investee but still wants to record its investment's profit and loss proportionately.

Equity Method

An accounting technique used to record investments in associate companies where the investor has significant influence, typically reflected by owning 20%-50% of voting stock.

Acquisition Method

A set of procedures used in accounting to consolidate the financial statements of a parent company and its subsidiaries.

Consolidated Revenues

The total earnings generated by a company and its subsidiaries, reported together as a single figure.