The abnormal net income model defines the market value of a firm
A) is its book value minus the present value of expected economic profits.
B) is its book value plus the present value of expected economic profits.
C) is its book value divided by the present value of expected economic profits.
D) is its book value multiplied by the present value of expected economic profits.
Question 2
Normal profit
A) is when economic profits are zero.
B) is the profit that competition will allow.
C) is the opportunity cost of capital.
D) all of these choices.
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