1.Hector Lector is valuing a private company, Premium Electronics, based on market approach methods. The purpose of valuation is for a potential takeover by a large public company. Which of the following

statements is most likely true?

A.If the prior transaction method is used, the transaction does not need to be

recent or at an arm's length

B.If the guideline public company method is used, a control premium does not

need to be estimated

C.Under the guideline transactions method, the control premium is already incorporated in the transaction

2.Asset-based approach to valuing private A.companies is most appropriate when:

B.companies are in the financial industry.

C.firms have high profits and growth prospects.

companies have a high proportion of intangible assets.