Question 1

The primary ownership interest characteristics that need to be addressed in almost every business valuation are the following EXCEPT:

Options :

A : Control or minority valuation basis (not necessarily a black-and--white issue ____there may be elements of control without absolute control

B : Degree of marketability

C : Fair market value

D : Fair market value on a nonmarketable, non-controlling ownership interest basis.

Answer: C,D

Question 2

Several factors influence __________________, particularly:

1. The proximity of the valuation date to the fiscal year-end

2. The quality of the interim statements

3. The importance of seasonality to the subject company

4. The extent to which information in interim statements is likely to affect the affect the conclusion

Options :

A : Usefulness of interim statements

B : Financial schedules

C : Federal tax returns

D : Audited statements

Answer: A

Question 3

____________ indicates that the collective going-on concern value of the total subject entity is less than the sum of the individual values of the entity's total tangible assets.

Options :

A : Goodwill

B : Positive goodwill

C : Negative goodwill

D : Trademarks

Answer: C

Question 4

In measuring the business risk, for many companies, sales volatility is the most important determinant of the fluctuation of net income measured by the standard deviation. Although companies may have some control over annual sales volume, sales volatility is, to a considerable extent, a function of the:

Options :

A : Economy-s overall health

B : Operating leverage

C : Consumers' willingness to spend their disposable income

D : GDP

Answer: A,C

Question 5

Market evidence indicated that adjustable-rate preferred stocks generally required yields in the range of ______________ basic points.

Options :

A : 42 to 445

B : 48-498

C : 32-500

D : 50-500

Answer: A

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