Question 1

The FASB says that, for ''unobservable inputs,'' the valuation should include market participant assumptions about risk, even if this adjustment is different to determine. Interestingly, it breaks risk into following categories EXCEPT:

Options :

A : The risk inherent in a particular valuation technique

B : The risk inherent in inputs of the valuation technique

C : The explicit risk related to a particular valuation technique

D : The implicit risk related to a particular valuation technique

Answer: C,D

Question 2

A series of small stock premium studies have been developed by Roger Grabowski and David King. They use eight different measures of size for two major groups (Equity size and Company size). Which of the following is/are measure/s of company size?

Options :

A : Market value of common equity

B : Book value of common equity

C : Market value of invested capital

D : Number of employees

Answer: C,D

Question 3

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 4

_________ is the value to some particular owner or potential owner, is found often in the context of mergers and acquisitions and in family law disputes

Options :

A : Marketable value

B : Control Value

C : Investment value

D : Strategic Control value

Answer: C

Question 5

____________ indicates that the collective going-on concern value of the total subject entity is less than the sum of the individual values of the entity's total tangible assets.

Options :

A : Goodwill

B : Positive goodwill

C : Negative goodwill

D : Trademarks

Answer: C

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