Which of the following is not a drawback to using liquidation valuation to value a merger or acquisition?
A) Not forward looking
B) Values based on existing assets
C) Can involve several imprecise estimates
D) Uses free cash flows because these are what are left over after all obligations are paid

Question

Quizplus · Accepted Answer

Liquidation valuation focuses on the value of a company's existing assets if sold off, not on free cash flows, which are used in other valuation methods like the discounted cash flow (DCF) method. This makes option D incorrect in the context of liquidation valuation drawbacks.

Which of the Following Is Not a Drawback to Using