The adjusted book value approach is useful in valuing holding companies whose main assets are publicly traded or other investment securities but is generally less applicable for operating businesses.

Question

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The adjusted book value approach is mainly used for holding companies that have investment securities as their primary assets. It may not be suitable for operating businesses that have other assets such as property, plant, and equipment, or intangible assets.

The Adjusted Book Value Approach Is Useful in Valuing Holding