The Capitalized Earnings Approach Determines the Value of a Business

question 114

Multiple Choice

The capitalized earnings approach determines the value of a business by capitalizing its expected profits using:

• A)the rate of return reflecting the risk level.
• B)the prime interest rate.
• C)the normal rate of return.
• D)the prevailing rate of inflation.

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Definitions:

Mildenhall Treasure

A collection of Roman silver tableware from the 4th century, discovered in Suffolk, England, and noted for its craftsmanship and historical significance.

England

A country that is part of the United Kingdom, known for its rich history, cultural contributions, and as the birthplace of the English language.

Egypt

A country in North Africa known for its ancient civilization and monumental architecture, including pyramids and the Great Sphinx.

Syria

A country in Western Asia, known for its ancient civilizations, rich cultural heritage, and recent conflicts.