Ways to value a business include comparison to other firms, benchmarking, or looking at a multiple of net earnings. Any of the methods is an attempt to arrive at a ________.
A) future value
B) net present value
C) fair market value
D) profit maximizing price

Question

Quizplus · Accepted Answer

The three methods listed are all ways to determine the fair market value of a business. However, looking at a multiple of net earnings is likely the most common and precise method, as it takes into account the profitability of the business.

Ways to Value a Business Include Comparison to Other Firms