QUESTION: 49

___________ proclaims that if valuing a company by the asset approach, the analyst should check to see whether capital gains taxes would be incurred on the liquidation of the assets. If so, it is possible that a discount should be taken for the capital gains tax liability.

Fiduciary duties
Contractual restrictions
Built-in gains discount
Potential dilution

Answer(s): C

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QUESTION: 50

Basic ways of approaching the valuation of non-controlling ownership interests are the following EXCEPT:

The discount approach
The direct comparison approach
The market-based approach
The bottom-up-approach (income approach)

Answer(s): C

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QUESTION: 51

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

Purchase or sale for cash
Exchange of equity for debt, or vice versa
Allocating total enterprise value among classes of securities in a leverages buyout, recapitalization (including)
Adjusting an equity statement owned or owed

Answer(s): D

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QUESTION: 52

Most typically, a company, or some or all of its stock, is to be sold and a debt security received as all or part of the consideration. The seller needs to know the cash-equivalent value of the consideration being received in return for the company or stock being given up. It is uncommon for notes or other debt securities issued in connection with the acquisition of a company to have a cash equivalent value of the securities value.

20 percent of
20 percent more or below
20 more than
20 percent below

Answer(s): B

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QUESTION: 49

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QUESTION: 52

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