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The Equation for the Value of a Company with the Earnings

Question 38

Multiple Choice

The equation for the value of a company with the earnings capitalization method is:


A) Company Value = Gross Revenue ÷ Book Value
B) Company Value = Net Income ÷ Capitalization Rate
C) Company Value = Net Income × Market price of stocks
D) Company Value = Sum of Cash Flow for the past five years
E) Company Value = Price of one share × number of shares

Correct Answer:

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