ABV Exam Ch 6 Questions & Answers 2024/2025
Guideline public company method is LEAST relevant under which scenario?
a. guideline companies are actively traded
b. subject is niche with no publicly traded competitors
c. there is a lot of information about the guideline companies
d. subject...
Guideline public company method is LEAST relevant under which scenario?
a. guideline companies are actively traded
b. subject is niche with no publicly traded competitors
c. there is a lot of information about the guideline companies
d. subject has size and growth characteristics similar to other public companies. - ANSWERSb. subject is
niche with no publicly traded competitors
The three common valuation approaches include all except:
a. rule of thumb
b. income approach
c. market approach
d. asset approach - ANSWERSa. rule of thumb
In using prior transactions in a company's stock to estimate a value under the market approach, which is
NOT a primary consideration?
a. size of the company
b. whether transaction was arms-length
c. control characteristics of interest transacted
d. date of prior transactions - ANSWERSa. size of the company
What is the type of value yielded by the guideline company method?
, a. minority and marketable
b. control and marketable
c. minority and nonmarketable
d. control or minority and marketable - ANSWERSd. control or minority and marketable
The M&A method is often used when valuing privately held companies. Which is NOT a disadvantage of
using this method?
a. vital info for the target company may be unavailable or missing
b. may be difficult to assess whether there were synergies in the M&A
c. specific assets acquired may be unknown
d. guideline public companies selected are not actively traded - ANSWERSd. guideline public companies
are not actively traded
Which is not an advantage of the M&A method?
a. easy to find comparable companies that have been acquired
b. transactions are considered objective because they come from the market
c. transactions are assumed to be between informed buyers and sellers, good rep of FMV
d. transactions involve entire companies that have changed hands, making it a logical approach of the
market approach - ANSWERSa. easy to find comparable companies that have been acquired
Which M&A source is based on public companies?
a. IBA Market Database
b. BIZCOMPS
c. Pratt's Stats
d. Public Stats - ANSWERSd. Public Stats
Which is included in a sale price with BIZCOMPS?
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