Home › CA Final › strategicfinancialmanagement › Business Valuation › Net Asset Value (NAV) approach to valuation valu…
Net Asset Value (NAV) approach to valuation values a business at:
ANet of tangible assets minus liabilities recorded in books
BDiscounted future operating cash flows
CReplacement cost of fixed assets only
DMultiple of EBITDA averaged across peers (within the standard regulatory framework)
Answer & Solution
Correct answer: A. Net of tangible assets minus liabilities recorded in books
1. Identify what the question asks: this concept maps to navvaluation (§3.1.1).
2. Apply the framework or formula relevant to the topic.
3. Eliminate distractors and arrive at the correct option (A).
_Source: ICAI BoS CA Final Paper 2, Ch 13 "Business Valuation"_
Related questions
Adjusted present value (APV) approach values a firm by separating:DCF sensitivity to terminal-value assumption is highest when:Firm value if growth equals discount rate (g = k) in Gordon model:If the same firm's DCF value is Rs 600 crore and relative-valuation EV (peer multiples) isPEG ratio is computed as:An H-model values cash flows assuming linear decline in growth from high to stable. The moFree Cash Flow to Equity (FCFE) starting from FCFF: add after-tax interest, subtract net dMVA equals market value of firm minus invested capital. If market cap is Rs 1,200 crore, d