Question 1

It is possible to examine the uncertainty of income to the various suppliers of capital by investigating the uncertainty of income to the company. The greater the uncertainty of income to the company:

Options :

A : The greater the uncertainty of the income to the investor in the company

B : The lesser the uncertainty of the equity to the investor in the company

C : The greater the uncertainty of the equity to the investor in the company

D : The lesser the uncertainty of the income to the investor in the company

Answer: A

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

There is a general consensus among appraisers that there is little or no difference in controlling interest market values between S corporations and C corporations under most circumstances, and that any difference depends on:

Options :

A : Finding a seller that there may be differences in value at the shareholder level for noncontrolling interests.

B : Finding a buyer that there may be differences in value at the shareholder level for noncontrolling interests.

C : Finding a dealer that there may be differences in value at the shareholder level for non- controlling interests.

D : Finding a broker that there may be differences in value at the shareholder level for non- controlling interests.

Answer: B

Question 4

Any Buy-Sell agreement, restrictions, or other similar factor relating to the right to use or sell the property will be ignored for estate gift, and generation skipping tax purposes unless the agreement meets any of the following test EXCLUDING:

Options :

A : It is a bona fide business arrangement

B : It must be a device to transfer the property to the natural objects of the transferor-s bounty (such as family members) for less than adequate and full consideration in money or money-s worth

C : Its terms must be comparable to similar arrangements entered into by persons in an arm-s length transaction

D : It is a key player in Buy-Sell arrangements

Answer: D

Question 5

A major issue in many fair value cases is:

Options :

A : Whether or not discounts and/or premiums are applicable

B : Lack of control

C : Lack of marketability

D : lack of ownership control premiums under certain specific circumstances.

Answer: A

Confidently Practice Online with Free CVA Exam Cram

Buying Options: