QUESTION: 21

Which of the following are categories in which projections are usually necessary?

Antitrust, lost business opportunity, breach of contract
Infringement of patents, copyrights or trademarks
Goodwill
Diversified businesses

Answer(s): A,B

"When earnings have once been "realized", so that they can be expressed with some approach to accuracy in the company's accounts, they are already water under the mill and have no direct bearing on what the property in question is now worth. Value, under any plausible theory of capitalized earning power is necessarily forward looking. It is an expression of the advantage that an owner of the property may expect to secure from the ownership in the future. The past earnings are therefore beside the point, save as a possible index of future earnings". This statement correctly expresses:

Realized earnings
Enterprise value
Realized earning verses prospective earnings
Prophesied gross and net earnings

Answer(s): C

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QUESTION: 23

One way or the other, the financial benefits of ownership of an interest in a business enterprise must come from the following sources EXCEPT:

Dividends, distributions, or other type of cash flow a) From operations, or
b) From investments (e.g. interest)
Liquidation or hypothecation of assets
Loan/Debt
Sale of interest

Answer(s): C

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QUESTION: 24

In many instances, value considerations are tempered by internal variables, often variables relative to specific shareholding as opposed to the company as a whole. Which of the following is NOT out of such variables?

Size of the subject interest (reflecting not only magnitude but control issues)
The right to vote and to impact the direction of the business
Restrictive provisions affecting ownership rights
Legal proceedings related to ownership or management prerequisites.

Answer(s): D

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QUESTION: 21

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QUESTION: 24

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