Important Issues That One Must Consider in Valuing Young Private

question 8

Multiple Choice

Important issues that one must consider in valuing young private firms include:

• A) whether key people remain in the firm, 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 firm, and whether a controlling ownership interest or a minority interest is being valued.
• D) whether the key people remain in the firm, the pretax operating cash flows generated by the firm in the coming years, and whether a controlling ownership interest or a minority interest is being valued.

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Definitions:

Binocular Rivalry

A phenomenon of visual perception in which perception alternates between different images presented to each eye.

Linear Perspective

A technique in art and photography that creates the illusion of depth and distance on a flat surface utilizing converging parallel lines.

Monocular Cues

Visual information that allows for the perception of depth and distance using one eye alone.

Binocular

Related to the use of both eyes, which allows for depth perception and a wider field of view compared to vision using one eye alone.