The valuation approach that gives the lowest value of the business is:

Question

Quizplus · Accepted Answer

The liquidation value approach looks at the value of the assets if the company were to be liquidated, which usually gives the lowest value because assets would be sold at a discount. The other three approaches (book value, present value of future cash flows, and earnings approach) all tend to give higher valuations as they focus on the earning potential of the business.

The Valuation Approach That Gives the Lowest Value of the Business