When Using the Multiples Analysis Approach to Valuing a Business

question 55

Multiple Choice

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

• A) of the presence of a marketability discount that can be sizable.
• B) that identifying one or more comparable firms is not an easy task.
• C) of differences in the capital structures of the firms being compared.
• D) All of the above.

Differentiate between testing for equality of variances versus testing for specific variance/standard deviation values.

Apply the critical value approach in hypothesis testing for variance and standard deviation.

Understand the relationship between sample variance/standard deviation and population variance/standard deviation.

Utilize appropriate significance levels (α) in hypothesis testing.

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