Canadian Securities Course (CSC) Level 1 Practice Exam

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What is goodwill?

  1. The excess of the amount paid for shares

  2. The market value of company equipment

  3. The revenue generated from customer loyalty

  4. The salary paid to executives

The correct answer is: The excess of the amount paid for shares

Goodwill is the excess of the amount paid for shares over the fair market value of the net assets acquired. It represents the intangible value of a business such as brand reputation, customer relationships, and strategic positioning that are not separately identifiable. This is why option A, "The excess of the amount paid for shares," is the correct answer. Options B, C, and D are not correct because goodwill does not refer to the market value of company equipment, the revenue generated from customer loyalty, or the salary paid to executives.

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