Week 7 Homework Quiz

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  • Topic: Balance sheet, Historical cost, Minority interest
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Week 7 : Business Valuations - Homework ES

1. (TCO G) A valuation professional who holds a CVA has the credentials of a: (Points : 2) Continuous valuation analyst.
Cost valuation of assets.
x Certified valuation analyst.
None of the above is correct

2. (TCO G) If a shareholder in a closely held business sells his or her stock, the valuation professional typically would: (Points : 2) Increase the value somewhat to get the minority owner out of the business. Do a standard professional valuation in which the minority interest issue is ignored. x Discount the value somewhat to reflect the diminished value of being a minority interest holder. Always use a historical cost basis analysis to take conservatism into account. None of the above is correct.

3. (TCO G) The most commonly accepted methods of business valuation use some form of: (Points : 2) Balance sheet analysis.
Historical cost basis.
Book value method.
x Income statement approach.

4. (TCO G) The conclusions presented in FASB No. 157 support which FASB Conceptual Framework? (Points : 2) FASB Conceptual Framework No. 2
FASB Conceptual Framework No. 6
FASB Conceptual Framework No. 7
x All of the above
None of the above

5. (TCO G) The major business valuation organization that has developed rigorous business valuation standards is: (Points : 2) The National Association of Business Valuation Analysts (NACVA) The American Society of Appraisers (ASA)

The Institute of Business Appraisers, Inc. (IBA)
x All of the above
None of the above

6. (TCO G) In a typical business valuation report, one exhibit that is seldom used is: (Points : 2) Limiting conditions.
Definitions of valuation terms.
Ratio analysis of the company.
Common size balance sheets of the company.
x None of...
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