Question 1

_________ 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 2

In measuring the business risk, for many companies, sales volatility is the most important determinant of the fluctuation of net income measured by the standard deviation. Although companies may have some control over annual sales volume, sales volatility is, to a considerable extent, a function of the:

Options :

A : Economy-s overall health

B : Operating leverage

C : Consumers' willingness to spend their disposable income

D : GDP

Answer: A,C

Question 3

The sales comparison approach is based on the economic principles of:

Options :

A : Efficient markets

B : Special financing and other terms regarding each sales transactions

C : Age of each property

D : Supply and demand

Answer: A,D

Question 4

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 5

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

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