n NISM Certifications
X NISM Series X
Medium

The break-up value of a share is arrived at using the liquidation value of assets and liabilities, which measures the current market value of a company if it were to be broken up and sold in individual assets. This method is particularly useful for valuing distressed companies or those without a viable future business case. The break-up value per share is calculated by subtracting the settlement value of debts from the liquidation value of assets and dividing by the number of equity shares issued and paid-up.

Practice question from NISM Series XIX A- Alternative Investments Funds (AIF) Distributors Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Net assets at book value

  2. B

    Assets and liabilities at book value

  3. Assets and liabilities at liquidation value

    Correct answer

  4. D

    Assets and liabilities at replacement value

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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