QUESTION: 133

___________ applies option pricing methods to value economic projects, companies, and financial securities. Just as option pricing models incorporate the filexibility of option holders’ decision as to whether and when to exercise an option by paying the exercise price.

Corporation based valuation
Valuing the built-in gains
Return option valuation
Real option valuation

Answer(s): D

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QUESTION: 134

One of the most controversial and unsettled issues in business valuation today is, the valuation of:

Corporations
C corporations
S corporations
MNCs

Answer(s): C

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QUESTION: 135

The purpose of Erickson and Wang study was to empirically quantify the increase in selling price realized by sellers of entire companies in cases where:

The buyer realizes a step-up in tax basis of the underlying assets when acquiring a “seasoned” S corporation
Most acquirers do not want to purchase stock of another corporation because of the potential for liability assumptions
The step-up in tax basis of the assets result in an increase in proceeds
The entire analysis should be based on entire data

Answer(s): A

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QUESTION: 136

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:

Finding a seller that there may be differences in value at the shareholder level for noncontrolling interests.
Finding a buyer that there may be differences in value at the shareholder level for noncontrolling interests.
Finding a dealer that there may be differences in value at the shareholder level for non- controlling interests.
Finding a broker that there may be differences in value at the shareholder level for noncontrolling interests.

Answer(s): B

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QUESTION: 133

QUESTION: 134

QUESTION: 135

QUESTION: 136