Question

which of the following statements is most accurate when describing the reasons the market value of...

which of the following statements is most accurate when describing the reasons the market value of a company could be substantially higher than it's book value?

a) the form uses equipment that has been fully depreciated
b) the company acquired a smaller company and opted not to recognize Goodwill after the acquisition
c) the projected growth for revenue is higher than in prior years
d) the company has a substantial amount of deferred revenue

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Market value of a company can be higher than its book value due to several reasons since the market discounts every information about the company that is available in its domain.

In the given situation, the statement that projected growth for revenue is higher than its previous years is the most acccurate statement. Since the revenue expected is higher, the EPS/ Profits will be higher which in terms raised the maarket value of the company.

Looking forward to your upvote & feedback. Hope this helps. Thanks!!

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Which of the following statements is most accurate: Eugene Fama developed a framework for describing the...
Which of the following statements is most accurate: Eugene Fama developed a framework for describing the degree to which markets are efficient. In his efficient market hypothesis, markets are efficient when prices reflect relevant information at any point in time. A price discrepancy must be sufficiently large to leave the investor with a profit (adjusted for risk) after taking account of the transaction costs and information-acquisition costs to reach the conclusion that the discrepancy may represent a market inefficiency. In...
1)When considering how to finance the acquisition of an asset, which of the following statements is...
1)When considering how to finance the acquisition of an asset, which of the following statements is true? A) The amount borrowed should be larger than the cost of the assets acquired. B) The cash flows generated by the assets should dictate the type of note (noninterest bearing, installment, etc) the company uses to finance the asset. C) The cash flow required by the type of note used should dictate the type of asset acquired. D) In order to minimize debt...
Which of the following statements is most accurate about the economies of North Korea and South...
Which of the following statements is most accurate about the economies of North Korea and South Korea? Multiple Choice Starting from similar economic positions prior to their division after World War II, South Korea's economy has grown to about 40 times the size of the North Korean economy. Since their division after World War II, North Korea's economy has achieved greater economic growth than South Korea. The economies of both North Korea and South Korea have grown at approximately the...
could you please answer now..? Suppose a firm with 3 business units - J, H &...
could you please answer now..? Suppose a firm with 3 business units - J, H & K - has an overall WACC of 12%. Invested capital in each unit earns the following returns: J = 7% H = 12% K = 15% The firm's stakeholders would best be served by: Growing unit K while divesting unit H Growing all units since each has a positive rate of return Growing unit J while divesting unit K Growing unit K while divesting...
1. Which of the following statements is CORRECT? a. corporate stakeholders are exposed to unlimited liability....
1. Which of the following statements is CORRECT? a. corporate stakeholders are exposed to unlimited liability. b. it is usually easier for proprietorships to raise large amounts of capital than corporations. c. one disadvantage of the corporations is operations pay more taxes than other types of businesses such as proprietorships or partnerships. d. corporations generally are subject to less regulations than proprietorships. 3. which of the following statements is NOT CORRECT? a. your uncle purchased 200 shares of Starbucks stock...
Which of the following statements is true of the LIFO cost flow assumption a. LIFO yields...
Which of the following statements is true of the LIFO cost flow assumption a. LIFO yields a higher net income than FIFO and averaging in a period of rising prices. b. LIFO provides a better matching of current costs and expenses. c. LIFO yields a higher cost of goods sold than other costing methods, in periods of falling prices. d. LIFO yields a lower ending inventory than other costing methods, in periods of falling prices. e. LIFO puts the earliest...
QUESTION 10 Which of the following statements is most correct? An option’s value is determined by...
QUESTION 10 Which of the following statements is most correct? An option’s value is determined by its exercise value, which is the market price of the stock less its strike price.  Thus, an option can’t sell for more than its exercise value. The potential loss on a call option increases as the underlying stock sells at higher and higher prices because the profit margin gets bigger. Issuing options provides companies with a low-cost method of raising capital The market value of...
1. Which is the most accurate definition of the study of economics? [1] Distributing surplus goods...
1. Which is the most accurate definition of the study of economics? [1] Distributing surplus goods to those in need. [2] Dealing with affluence in a morally bankrupt world. [3] Using scarce resources to satisfy unlimited human wants. [4] Reducing human wants to eliminate the problem of scarcity. 2. Computer software represents [1] labour. [2] land. [3] capital. [4] entrepreneurship. 3. Suppose you have graduated with a degree in accounting and are offered a job with an accounting firm. But...
QUESTION 14 The following is the priority sequence in which liquidation proceeds will be distributed for...
QUESTION 14 The following is the priority sequence in which liquidation proceeds will be distributed for a partnership partnership drawings, partnership liabilities, partnership loans, partnership capital balances partnership liabilities, partnership loans, partnership capital balances partnership liabilities, partnership loans, partnership drawings, partnership capital balances partnership liabilities, partnership capital balances, partnership loans 5 points    QUESTION 15 In a lump-sum liquidation of a partnership all assets are paid to the partners based on their initial contribution, with the oldest partnering being paid...
21.  Which of the following is a characteristic of a liability?       a. It creates a present obligation...
21.  Which of the following is a characteristic of a liability?       a. It creates a present obligation for future payment of cash or services.       b. It cannot be settled with services.       c. It is an avoidable obligation.       d It occurs because of a future transaction or event. 22.  Assuming rising prices, which method will give the highest dollar value for cost of goods sold on the income statement?       a.  FIFO       b.  Average Cost       c.  LIFO       d. All of these give equal values for cost of...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT