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

___________ may apply to publicly traded stock where the size of the block is large enough relative to normal trading volume that it could not be sold in a short time without depressing the market price.

Options :

A : Discounts for lack of control

B : Blockage discounts

C : Discounts for lack of marketability

D : Contingent liability discounts

Answer: B

Question 3

There is a general consensus among appraisers that there is little or no difference in controlling interest market values between S corporations and C corporations under most circumstances, and that any difference depends on:

Options :

A : Finding a seller that there may be differences in value at the shareholder level for noncontrolling interests.

B : Finding a buyer that there may be differences in value at the shareholder level for noncontrolling interests.

C : Finding a dealer that there may be differences in value at the shareholder level for non- controlling interests.

D : Finding a broker that there may be differences in value at the shareholder level for non- controlling interests.

Answer: B

Question 4

The sales comparison approach is based on the economic principles of:

Options :

A : Efficient markets

B : Special financing and other terms regarding each sales transactions

C : Age of each property

D : Supply and demand

Answer: A,D

Question 5

When is the guideline merged and acquired company method most useful?

Options :

A : The initial value derived from the guideline merged and acquired company method, before adjustment for factors such as size of subject block and degree of marketability, is an indication of transaction prices of major ownership interest, usually controlling ownership interests.

B : When same acquisition target has different buyers both due to perception and reality

C : At the time of achieving synergies

D : In estimation of enterprise value

Answer: A

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