Which of the following methods is not used to value a noncontrolling interest under circumstances where a control premium is applied to determine the appropriate value for such interest?
A) Valuation models based on subsidiary discounted cash flows.
B) Valuation models based on subsidiary residual income projections.
C) Comparison with comparable investments.
D) The application of a safe harbor discount rate.
E) Fair value based on market trades.

Question

Quizplus · Accepted Answer

The application of a safe harbor discount rate is not a method used to value a noncontrolling interest with a control premium. Safe harbor rates are typically used for tax purposes or regulatory compliance, not for valuation of noncontrolling interests.

Which of the Following Methods Is Not Used to Value