Which of the following is NOT a limitation of the liquidation valuation approach?
A)It leads to imprecise estimates.
B)The resulting value estimates are not forward-looking.
C)The estimates change frequently and require constant updating.
D)All of these are limitations of the liquidation valuation approach.

Question

Quizplus · Accepted Answer

The liquidation valuation approach primarily focuses on the current value of a company's assets minus liabilities, assuming the company is liquidated. This method does not inherently require frequent updates more than any other valuation approach, as it is based on a snapshot in time rather than ongoing operations or future projections.

Which of the Following Is NOT a Limitation of the Liquidation