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A Simple Method of Valuing a Private Company Is to Apply

question 71

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A simple method of valuing a private company is to apply the price-earnings ratios of publicly traded firms in the same industry to the private company's earnings.


Definitions:

Operation of Law

Changes in legal rights or obligations that occur automatically due to established legal rules, without the need for action by the parties involved.

Discharged

Refers to the completion or termination of an obligation or responsibility, such as a debt being paid off or a contractual duty being fulfilled.

Frustration of Purpose

A legal doctrine that excuses a party from fulfilling a contract when an unforeseen event undermines the contract's original reason.

Unexpected Event

An occurrence or situation that was not foreseen or anticipated and may significantly impact contracts or legal obligations.

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