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NACVA AVA Exam
NACVA Accredited Valuation Analyst Exam (Page 11 )

Updated On: 7-Feb-2026
Page 11 of 70
PDF with 343 Questions

If there are five directors to be elected, and 500 shares are outstanding and voting for the election of directors, the minimum number of shares necessary to elect one director would be 84 shares. Proof: 84 shares time five directors to be elected equals 420 votes, all cast for one director. Assuming the rest of the stock (416 shares) votes en bloc as the majority, such total of 2,080 votes distributed among five directors would be 416 votes each. Therefore, individual representing the minority and receiving its 420votes is sure to get one of the places on the board, the majority getting the other four places. The minority in this example must be sure to vote all of its 420 votes for one director; if it distributed the 420 votes among two, it obviously would not win any places on the board.

Cumulative voting, move over, requires a majority of the stock to be able to elect a majority of the board. In the above example, five directors,___________ shares are necessary, or a majority of the___________ shares total.

  1. 200, 400
  2. 150, 300
  3. 251, 500
  4. 249, 500

Answer(s): C



If the language of the relevant agreements indicates that minority block of stock will be valued on a controlling ownership interest level of value, a full lack of control discount will not apply to the transactions to which the provision is applicable. For example:

  1. The agreement may say that the subject shares will be valued “on an enterprise basis” or as “a per share portion of the over all company value.”
  2. A lack of control discount must be applicable to over all business value
  3. Lack of control discount may not be inflated due to influences of ownership control
  4. Some of the benefits of ownership control are lost due to public disclosure

Answer(s): D



11- ___________
1+ premium
This is a formula for:

  1. Converting a control premium
  2. Identifying a total of shareholders
  3. Converting a control premium to a market based premium
  4. Converting a control premium to an implied minority discount

Answer(s): D



___________ 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.

  1. Fiduciary duties
  2. Contractual restrictions
  3. Built-in gains discount
  4. Potential dilution

Answer(s): C



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

  1. The discount approach
  2. The direct comparison approach
  3. The market-based approach
  4. The bottom-up-approach (income approach)

Answer(s): C






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