For which type of industry is the asset-based approach more suitable?
APure software start-ups
BCapital intensive industry
CConsulting practices
DAdvertising agencies
Answer & Solution
Correct answer: B. Capital intensive industry
Firms heavy in tangible assets are better captured by a sum of asset values.
Keep practising Business Valuation
Browse all Business Valuation questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
How is marketability of a business interest defined?A controlling interest is defined as an investor acquiring more than what share of a compaWhich level of value is lowest for equity interests in a private firm?A buyer pays a 100% control premium over the minority price. What is the implied minority A private firm valued using listed-peer multiples is usually adjusted for what?In the guideline public company method, the comparison with listed firms is expressed as wWhy is the asset-based approach weak for a going concern?Why do some critics doubt the objectivity of the WACC method?