Exam 11: Fundamentals of Business Valuation

The book value of a business may or may not represent its fair market value.

Which of the following methods is commonly used to establish a floor value for the company?

Which of the following is the foremost professional organization for the business valuation discipline?

Which of the following is true of nonoperating assets of a business?

Which of the following statements is true of fair value as a standard of valuation?

As per the Rev. Rul. 59-60 (Sec. 4), which of the following factors should be considered in valuations?

________ proposes a "hypothetical" sale price for cash. This hypothetical sale takes place in an open and unrestricted marketplace.

Why is identification of the ownership interest to be valued important?

In practice, absent valid market comps, forensic accountants most commonly use the dividend payout method.

Which of the following is true of the net asset method?

What is the significance of industry risk premium and specific company risk premium?

Which of the following is true of the standards of value used in business valuation?

A valuation performed in litigation must conform to the reporting provisions of professional standards.

A calculation engagement is limited in scope to specific approaches and methods determined by agreement with the client.

Which of the following standards of value is often used in dissenting minority interest in litigation?

Which of the following engagements allows the forensic accountants to apply any approaches and methods deemed appropriate?

Which of the following standards of value is mandated for all federal tax matters?

Which of the following is a primary issue of the business valuation theory?

Prospective data are more commonly used to value closely held companies.

Excluding valuation discounts allows for a more equitable determination of fair value. Substantiate.