The Residual Income Valuation Model Is a Rigorous and Straightforward

question 60

Multiple Choice

The residual income valuation model is a rigorous and straightforward valuation approach, but the analyst should be aware of all of the following implementation issues that will hinder its ability to measure firm value correctly except:

• A) common stock transactions
• B) portions of net income attributable to equity claimants other than common shareholders
• C) dirty surplus accounting items
• D) positive book value of equity

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