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b.) Imagine an industry or stock market where intangible assets generate most of the companies abnormal income, where companies invest heavily in intangible assets, but

b.) Imagine an industry or stock market where intangible assets generate most of the companies abnormal income, where companies invest heavily in intangible assets, but where accounting standards are such that most of the investment in intangible assets must be expensed (rather than capitalised). What will be the effect on reported earnings and equity? How would you value a company in this situation?

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