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CEPA - Exit Options Analysis: Questions With Solutions
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CEPA - Exit Options Analysis: Questions With Solutions
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CEPA - Exit Options Analysis: Questions With SolutionsBased on the 2013 EPI State of Owner Readiness Survey, how many business
owners were not familiar with all their transition options? Right Ans -
Nearly 2/3rds
What is a pro for an intergenerational transfer? Right Ans - a) Business
legacy preservation b) Planned c) Lower cost
Which of the following is not an inside exit option? Right Ans -
Recapitalization
What are the two general categories for private ownership exit options?
Right Ans - Inside and Outside
. A business owner you are advising on exit options does not have a family
member or children to transfer the business to. She would like the exit option
that will get her the highest price for the business, more cash up front, and
will allow her to walk away faster. What option do you recommend? Right
Ans - Third Party Sale
Inside Sale options Right Ans - i. Intergenerational transfer ii. Management
buyout iii. Sale to existing partners iv. Sale to employees (ESOP)
Outside Sale options Right Ans - i. Sale to third party ii. Recapitalization iii.
IPO iv. Orderly liquidation
When asked, "what best describes how you are planning to transition?" Owner
plans for transition, based on 2013 SOOR: Right Ans - i. 35.6% indicated
they would transition via an internal exit option ii. 31.4% indicated they
would transition via an external option iii. 30.9% indicated they were not sure
iv. 2% of the sample answered "other
Intergenerational transfer Right Ans - . Transfer of business stock to direct
heirs, usually children. 50% of business owners want to exercise this option -
in reality, only about 30% actually do
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