How can we calculate the value of an entire firm? Check all that apply: As all...

How can we calculate the value of an entire firm?

Check all that apply:

As all future cash inflows minus outflows

As all future revenue

As the sum of outstanding stocks and liabilities

As all future net earnings

Solutions

Expert Solution

Option 1 - Select

The value of the company can be identified by discounting all the firm's future cash inflows subtracting the cash inflows, which will help to determine the present net worth of the company.

Option 2: Select

The company's future sales revenue is used to calculate the value of the company, it is multiplied by the percentage the company can grow in the future, which bring the value of the company.

Option 3: Select

The company's total market capitalisation which is the value of equity and total debt is used to calculate the value of the company because this is the total capital of the firm has to finance the assets.

Option 4:Select

The company's net earning is used to determine the profit the company is generating to shareholders, it gives the picture of how well the company is performing , The sum of all the future earnings is the free cash flow available to the shareholders, therefore, it is used to calculate the value of the company.

jeff jeffy answered 1 year ago

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