Question 1

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

Question 2

Several factors influence __________________, particularly:1. The proximity of the valuation date to the fiscal year-end2. The quality of the interim statements3. The importance of seasonality to the subject company4. 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

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

Question 4

The discount rate is a market-driven rate. It represents the expected yield rate-or rate of return-necessary to induce:

Options :

A : Investors to commit available funds to the subject investment, given its level of risk

B : Yield rate

C : Dividends

D : Investment yield

Answer: A

Question 5

Discounts for contingent liabilities can cover a wide range of spectrum, such as:

Options :

A : Environmental liabilities

B : Pending lawsuits

C : Liability for controlling ownership interest

D : Both A and B

Answer: D

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