Answered: Firms with valuable intangible assets…

Firms with valuable intangible assets are more likely to show a(n): excess of market value over book value of equity. low going-concern value. low P/E ratio. low liquidation value.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter3: Evaluation Of Financial Performance

Section: Chapter Questions

Problem 12QTD

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Concept explainers

Loanable Funds Theory

The loanable funds theory is a neoclassical theory that determines the interest rate where the demand for loanable investments and supply of loanable funds intersect. To determine the interest rate, this theory employs linear regression and a demand curve. At the equilibrium point, demand for borrowings and demand for the issuance of borrowing funds are inextricably linked. This point of equilibrium should equalize demand and the supply of money available for borrowing.

Question

Firms with valuable intangible assets are more likely to show a(n):
excess of market value over book value of equity.
low going-concern value.
low P/E ratio.
low liquidation value.

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