Question 1

The most frequently encountered reasons for needing to value debt securities are the following EXCEPT:

Options :

A : Purchase or sale for cash

B : Exchange of equity for debt, or vice versa

C : Allocating total enterprise value among classes of securities in a leverages buyout, recapitalization (including)

D : Adjusting an equity statement owned or owed

Answer: D

Question 2

____________ is perhaps the most difficult task for the business appraiser.

Options :

A : Getting two or more parties with different economic and business expectations to agree on projected future benefits and the risks associated with achieving those projections.

B : Identification of partial interest.

C : Selection of enterprise value premise.

D : Estimation of invested capital

Answer: A

Question 3

___________ 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 4

Based on the purpose and objective of the valuation, the analyst will apply the appropriate standard of value to the subject equity interest. The standard of value for the individual assets and liabilities may be different from the standard of value for the subject equity interest. For example:

Options :

A : The analyst may apply the fair market value standard to the individual assets andliabilities even though a different standard of value is determined for the subject equity interest

B : The asset accumulation method will typically indicate the value of 100 percent of the subject company

C : The analyst may apply the fair market value standard to corporate assets even though the same standard of value is determined for the subject equity interest

D : The analyst can apply the ''axiomatic assets minus liabilities'' to indicate the value of the subject business enterprise

Answer: A

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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