CompTIA
Checkpoint
ISC
HP
Dell
EC-Council
EXIN
Fortinet
ITIL®
Juniper
PMI
Microsoft
VMware
Avaya
Google
Salesforce
Amazon
Palo Alto Networks
Certiport
ISC2
All Vendors
  2. Home
  3. Exams
  4. Financial
  5. ABV

Free ABV Exam Braindumps (page: 46)

Page 45 of 87
PDF with 344 Questions

Which of the following assumption is a base for the process of unlevering and relevering betas to an assumed capital structure?

  1. Business interest subject to valuation has the ability to change the capital structure of the subject company
  2. Investors are risk averse
  3. Subject companies are at market value in this process
  4. The amount of debt and equity at market value.

Answer(s): A



The assumptions underlying the capital asset pricing model are as follows:

  1. Investors are risk averse
  2. Rational investors seek to hold efficient portfolios-that is, portfolios that are fully diversified
  3. All investors have identical investment time horizons (i.e., expected holding periods)
  4. The rate received from lending money is more than the cost of borrowing money

Answer(s): D



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?

  1. Market value of common equity
  2. Book value of common equity
  3. Market value of invested capital
  4. Number of employees

Answer(s): C,D



The Build-Up model divides the risk premium into its subcomponents and estimates the cost of capital as the sum of the following:
1.A risk-free
2.A risk premium, including one or all of following subcomponents EXCEPT:

  1. An equity risk premium
  2. A size premium
  3. A company-specific risk premium
  4. Investment-specific risk

Answer(s): D






Post your Comments and Discuss Financial ABV exam with other Community members:

ABV Discussions & Posts