Question #29
Reading: Reading 19 Equity Valuation - Applications and Processes
PDF File: Reading 19 Equity Valuation - Applications and Processes.pdf
Page: 11
Status: Unattempted
Correct Answer: B
Question
A valuation of a firm based on the current market price of its assets - liabilities is referred to as the firm's:
Answer Choices:
A. going-concern value
B. liquidation value
C. operating value
Explanation
The liquidation value is based on the assumption that the firm will cease to operate and all
of its assets will be sold to repay liabilities.