The Valuation Method That Is Commonly Used,but Tends to Oversimplify

question 23

Multiple Choice

The valuation method that is commonly used,but tends to oversimplify the valuation process,is called:

• A)the excess-earnings method.
• B)the balance sheet method.
• C)the capitalization method.
• D)the market approach.

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Definitions:

P(B)

The probability notation referring to the likelihood of event B occurring.

Independent

Not influenced by or contingent upon others; describes variables that operate without interference from other variables.

P(B|A)

The probability of event B occurring given that event A has already occurred, indicating a conditional probability.

P(A and B)

The likelihood of event A and event B happening simultaneously.