When Using the Multiples Analysis Approach to Valuing a Business

question 53

Multiple Choice

When using the multiples analysis approach to valuing a business, one must be aware:

• A) of the presence of a marketability premium that can be sizable.
• B) of the adjusted book value of a business which is the cost of duplicating the assets of the business in their present form as of the valuation date.
• C) of the stock value of similar companies whose shares are not publicly traded.
• D) of the presence of a potentially large marketability discount.

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Definitions:

Consumerism Era

A period characterized by the emphasis on consumer rights, the proliferation of goods and services, and the increase in consumption as a part of the economy.

Sales Era

A period in the history of marketing, roughly from the early to mid-20th century, characterized by a focus on selling products through aggressive sales techniques.

Customer Experience

The overall perception and feelings a customer has about their interactions with a company or brand across all touchpoints.