When Using the Multiples Analysis Approach to Valuing a Business

question 48

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 marketability discount that can be sizable.

---

Definitions:

Cost-Saving

Measures or strategies that lead to a reduction in expenses, increasing the efficiency of financial operations.

Time-Saving

Measures or techniques that lead to the reduction of time spent on tasks or activities.

Pretrial Negotiations

discussions and agreements made between the parties involved in a legal case with the aim to resolve the matter before it goes to trial.

Out-Of-Court Settlement

An agreement reached between parties in a dispute without the need for a court trial, often involving negotiation or mediation.