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NACVA Accredited Valuation Analyst Exam Questions 166–170 (page: 35)

Updated On: 9-Feb-2026

For valuation purposes, the measurement of economic income to be analyzed can be defined in several different ways. Different measurements of economic income that are commonly analyzed in this approach include the following EXCEPT:

  1. Payouts (e.g. dividends, interest, security sales proceeds, or partnership withdrawals)
  2. Cash flow (often measured as net cash flow)
  3. The discount rate
  4. Some measure of accounting earnings (often net income or net)

Answer(s): C



The basic valuation model, which is central to the income approach to valuation, has only two variables. Which of the following is/are NOT out of those variables?

  1. The amount of the expected prospective economic income in each period
  2. The required rate of return (yield rate) by which the expected prospective economic income receipts should be discounted
  3. Common equity
  4. Economic income measured

Answer(s): C,D



The discount rate is a market-driven rate. It represents the expected yield rate-or rate of return necessary to induce:

  1. Investors to commit available funds to the subject investment, given its level of risk
  2. Yield rate
  3. Dividends
  4. Investment yield

Answer(s): A



If Paola Pizza Parlors stock started the year at $10 per share, paid $0.50 in cash dividends during the year, and ended the year ay $11.50 per share, then the total investment yield or rate of return for the year would be:

  1. 0.30
  2. 0.10
  3. 0.50
  4. 0.20

Answer(s): D



Which of the following is/are NOT out of components of the discount rate?

  1. A “Risk-free rate” (the amount that an investor feels certain of realizing over the holding period). This includes:
    a). A “rental rate” for forgoing the use of funds over the holding period
    b). The expected rate of inflation over the holding period
  2. A premium for risk, this includes:
    a). Systematic risk (that risk that relates to improvements in returns on the investment market in general)
    b). Unsystematic risk (that risk is specific to the subject investment)
  3. Premium value
  4. Discount rate

Answer(s): C,D



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