1. Which of the following data would be not useful in valuing a closely held business?
a. Price/Earnings Ratio
b. Capital Assest Pricing Model
c. Beta
d. None of the above would be useful
2. When valuing a closely held business, which of the following is considered the most difficult?
a. Determining how many years to include in the analysis
b.Developing normalizing entries
c. Determining the capitalization/discount rate
d. All of the above are equally difficult
Noodles have a 0.7 price elasticity of demand.
3. What is the best description of the state of demand for noodles?
a. Elastic
b. Inelastic
c. Perfectly elastic
d. Perfectly inelastic
4. Which of the following is not a method of valuing intangibles?
a. CAPM model
b. Allocated value in arms-length bargaining
c. Residual Value
d. Earnings based approach
5. When valuing a closely held business, which of the following is considered the most difficult?
a. Determining how many years to include in the analysis
b. Developing normalizing entries
c. Determining the capitalization/discount rate
d. All of the above are equally difficult
6. The Build-up model of developing a discount rate is most often used when valuing the following types of companies
a. Small public companie
b. Small Private Companies
c. Large Public Companies
d. Either small or large public companies
7. Which of the following is not an external factor that affects the capitalization rate?
a. Expectations of a particular industry
b. Competitive environment of a particular industry
c. The income trend of the client over five years
d. Existing conditions of the general economy