CFA CFA Level 1 Question of the Week – Equity

Question of the Week – Equity

  • This topic has 1 reply, 2 voices, and was last updated Aug-18 by scarebaer.
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    • AdaptPrep
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      The balance sheet value of assets and liabilities of a natural resources company are $100 million and $82 million, respectively. However, the fair value of assets and liabilities of the company are $112 million and $86 million, respectively. The asset-based valuation of the equity of the company is closest to:

      • $18 million
      • $26 million
      • $112 million
    • scarebaer
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      So A – L = E. The “asset-based” approach is described as the fair market value of the company. Or more logically – What it would cost to recreate the business. So in this case $112 – 86m = 26m. Answer B 

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