Which of the following are often true about the challenges of valuing private firms?
A) There is a lack of analyses generated by sources outside of the company.
B) Financial reporting systems are often inadequate.
C) Management depth and experience is often limited.
D) Reported earnings are often understated to minimize taxes.
E) All of the above.

Question

Quizplus · Accepted Answer

All of the above statements are often true when valuing private firms. A lack of analyses from outside sources can make it more difficult to assess the company's value. Inadequate financial reporting systems can also make it challenging to obtain accurate financial information. Limited management depth and experience can impact the company's potential for growth and profitability. Finally, reported earnings may be intentionally understated to minimize taxes, which can make it difficult to accurately assess the company's financial health.

Which of the Following Are Often True About the Challenges