Question 1

Which of the following methods is used in combination with net asset value method in the absence of valid market comps?

Accepted Answer

A)  capitalization of earnings method 
B)  guideline transaction method 
C)  dividend payout method 
D)  earnings payout method 
A)  capitalization of earnings method 
B)  guideline transaction method 
C)  dividend payout method 
D)  earnings payout method A

Question 2

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

Accepted Answer

A)  dividend payout method 
B)  capitalization of earnings method 
C)  net asset value method 
D)  guideline transaction method 
A)  dividend payout method 
B)  capitalization of earnings method 
C)  net asset value method 
D)  guideline transaction method C

Question 3

Which of the following methods involves the development of a proxy benefit?

Accepted Answer

A)  net asset value method 
B)  guideline transaction method 
C)  capitalization of earnings method 
D)  dividend payout method 
A)  net asset value method 
B)  guideline transaction method 
C)  capitalization of earnings method 
D)  dividend payout method C

Question 4

A detailed report is a structured and comprehensive submission designed to provide the reader with a sufficient understanding of the data,reasoning,and analysis underlying the conclusion of value.

Accepted Answer

A) True 
 B)False

Question 5

The NAV method determines a company's value as the difference between the book value of its assets and the fair market value of its liabilities.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A)  Investment value is usually lesser fair value. 
B)  Investment value is usually lesser than fair market value. 
C)  Investment value is usually greater than book value. 
D)  Investment value is usually greater than fair value. 
A)  Investment value is usually lesser fair value. 
B)  Investment value is usually lesser than fair market value. 
C)  Investment value is usually greater than book value. 
D)  Investment value is usually greater than fair value.

Question 7

Which of the following is true of a summary report?

Accepted Answer

A)  It is a structured and comprehensive submission. 
B)  It includes certain minimum elements already included in the detailed report. 
C)  It identifies the procedures and scope of work performed. 
D)  It is a limited scope report and should be explicitly titled as a "summary report." 
A)  It is a structured and comprehensive submission. 
B)  It includes certain minimum elements already included in the detailed report. 
C)  It identifies the procedures and scope of work performed. 
D)  It is a limited scope report and should be explicitly titled as a "summary report."

Question 8

Why it is important to distinguish between enterprise goodwill and personal goodwill in divorce valuations?

Accepted Answer

A)  In many states, enterprise goodwill is not considered a marital asset while personal goodwill is. 
B)  In many states, enterprise goodwill is considered a marital asset while personal goodwill is not. 
C)  Enterprise goodwill can be valued reasonably, while it is not possible to value personal goodwill. 
D)  Enterprise goodwill cannot be separately identified, while personal goodwill can be identified. 
A)  In many states, enterprise goodwill is not considered a marital asset while personal goodwill is. 
B)  In many states, enterprise goodwill is considered a marital asset while personal goodwill is not. 
C)  Enterprise goodwill can be valued reasonably, while it is not possible to value personal goodwill. 
D)  Enterprise goodwill cannot be separately identified, while personal goodwill can be identified.

Question 9

Which of the following gives the calculation of the capitalization rate?

Accepted Answer

A)  the equity risk premium plus the specific company risk premium 
B)  the required rate of return minus the risk free rate 
C)  the dividend payout rate plus the long-term sustainable growth rate 
D)  the discount rate minus the expected long-term sustainable growth rate 
A)  the equity risk premium plus the specific company risk premium 
B)  the required rate of return minus the risk free rate 
C)  the dividend payout rate plus the long-term sustainable growth rate 
D)  the discount rate minus the expected long-term sustainable growth rate

Question 10

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

Accepted Answer

The industry risk premium is the additio

Question 11

Which of the following should be the first phase of analysis of information gathered for a business valuation engagement?

Accepted Answer

A)  identifying significant relevant factors 
B)  reconciling information collected with the financial statement analysis 
C)  analysis of the company's financial statements 
D)  developing a discount rate 
A)  identifying significant relevant factors 
B)  reconciling information collected with the financial statement analysis 
C)  analysis of the company's financial statements 
D)  developing a discount rate

Question 12

Which of the following situations will result in the investment value of a business approximating to the fair market value of the business?

Accepted Answer

A)  when an investor's requirements and expectations are different than the fair value of the business 
B)  when an investor's requirements and expectations are representative of the book value of the business 
C)  when an investor's requirements and expectations are different than the market 
D)  when an investor's requirements and expectations are representative of the market 
A)  when an investor's requirements and expectations are different than the fair value of the business 
B)  when an investor's requirements and expectations are representative of the book value of the business 
C)  when an investor's requirements and expectations are different than the market 
D)  when an investor's requirements and expectations are representative of the market

Question 13

Which of the following is situation commonly drives a business valuation engagement?

Accepted Answer

A)  hypothecation of assets 
B)  shareholder dispute 
C)  hedging a company's derivatives 
D)  determination of dividend payout 
A)  hypothecation of assets 
B)  shareholder dispute 
C)  hedging a company's derivatives 
D)  determination of dividend payout

Question 14

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

Accepted Answer

The second most widely recognized standa

Question 15

Fair market value proposes an actual sale price for cash.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following methods is used under the income approach of business valuation?

Accepted Answer

A)  net asset value method 
B)  capitalization of earnings method 
C)  dividend payout method 
D)  guideline transaction method 
A)  net asset value method 
B)  capitalization of earnings method 
C)  dividend payout method 
D)  guideline transaction method

Question 17

Explain the two methods that are commonly considered under the market approach of valuation of the company.

Accepted Answer

Under the market approach,a company's va

Question 18

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

Accepted Answer

A)  the price earnings ratio of the company 
B)  the earning capacity of the company 
C)  the fair market value of the stock of the business 
D)  the book value of stocks of similar companies 
A)  the price earnings ratio of the company 
B)  the earning capacity of the company 
C)  the fair market value of the stock of the business 
D)  the book value of stocks of similar companies

Question 19

Which of the following is a premise of value that is applied to business valuations?

Accepted Answer

A)  going concern 
B)  materiality 
C)  substance over form 
D)  neutrality 
A)  going concern 
B)  materiality 
C)  substance over form 
D)  neutrality

Question 20

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

Accepted Answer

A)  valuation engagement 
B)  calculation engagement 
C)  consultation engagement 
D)  standardization engagement 
A)  valuation engagement 
B)  calculation engagement 
C)  consultation engagement 
D)  standardization engagement

Which of the following methods is used in combination with net asset value method in the absence of valid market comps?

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

Which of the following methods involves the development of a proxy benefit?

A detailed report is a structured and comprehensive submission designed to provide the reader with a sufficient understanding of the data,reasoning,and analysis underlying the conclusion of value.

The NAV method determines a company's value as the difference between the book value of its assets and the fair market value of its liabilities.

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

Which of the following is true of a summary report?

Why it is important to distinguish between enterprise goodwill and personal goodwill in divorce valuations?

Which of the following gives the calculation of the capitalization rate?

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

Which of the following should be the first phase of analysis of information gathered for a business valuation engagement?

Which of the following situations will result in the investment value of a business approximating to the fair market value of the business?

Which of the following is situation commonly drives a business valuation engagement?

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

Fair market value proposes an actual sale price for cash.

Which of the following methods is used under the income approach of business valuation?

Explain the two methods that are commonly considered under the market approach of valuation of the company.

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

Which of the following is a premise of value that is applied to business valuations?

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

Introduction to the World of Forensic Accounting

The Legal Environment of Forensic Accounting

Screening and Staging Engagements

Gathering Evidence Interviews and Observations

Financial Statements Analysis Reading Between the Lines

Fraud and White-Collar Crime

Conducting a Fraud Investigation

Transforming Data Into Evidence

Transforming Data Into Evidence

Professional Responsibilities

Special Topics

Filters

Exam 11: Fundamentals of Business Valuation

Which of the following methods is used in combination with net asset value method in the absence of valid market comps?

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

Which of the following methods involves the development of a proxy benefit?

A detailed report is a structured and comprehensive submission designed to provide the reader with a sufficient understanding of the data,reasoning,and analysis underlying the conclusion of value.

The NAV method determines a company's value as the difference between the book value of its assets and the fair market value of its liabilities.

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

Which of the following is true of a summary report?

Why it is important to distinguish between enterprise goodwill and personal goodwill in divorce valuations?

Which of the following gives the calculation of the capitalization rate?

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

Which of the following should be the first phase of analysis of information gathered for a business valuation engagement?

Which of the following situations will result in the investment value of a business approximating to the fair market value of the business?

Which of the following is situation commonly drives a business valuation engagement?

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

Fair market value proposes an actual sale price for cash.

Which of the following methods is used under the income approach of business valuation?

Explain the two methods that are commonly considered under the market approach of valuation of the company.

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

Which of the following is a premise of value that is applied to business valuations?

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

Introduction to the World of Forensic Accounting

The Legal Environment of Forensic Accounting

Screening and Staging Engagements

Gathering Evidence Interviews and Observations

Financial Statements Analysis Reading Between the Lines

Fraud and White-Collar Crime

Conducting a Fraud Investigation

Transforming Data Into Evidence

Transforming Data Into Evidence

Professional Responsibilities

Special Topics

Filters