Important Issues That One Must Consider in Valuing Private Companies

question 9

Multiple Choice

Important issues that one must consider in valuing private companies include

• A) whether key people remain in the company, the amount of dividends that one may receive in the coming years, and whether a controlling ownership interest or a minority interest is being valued.
• B) the difficulty in valuing young, rapidly growing companies in contrast to mature, stable companies, the amount of dividends that one may receive in the coming years, and whether a controlling ownership interest or a minority interest is being valued.
• C) the difficulty in valuing young, rapidly growing companies in contrast to mature, stable companies, whether key people remain in the company, and whether a controlling ownership interest or a minority interest is being valued.
• D) None of the above.

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Definitions:

Relative Frequency

A measure indicating how often a certain value, event, or outcome occurs in relation to the total number of cases observed.

Diagnosis

The process of identifying the nature of an illness or other problem by examination of the symptoms.

Venn Diagrams

Graphical representations using circles to show the relationships and differences between various sets.

Intersection

The point or set of points where two or more geometric figures meet or cross.