Free CVA – Certified Valuation Analyst Practice Test Question

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  Cumulative dividends or distribution rights

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  Non-voters having voting rights

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  Flexible and optional redemption rights

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  Non-lapsing conversion rights
  
  

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  Through calculating the degree of financial leverage

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  Through calculating various leverage ratios

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  Standard deviation of net income

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  Calculating the level of company’s fixed operating income
  
  

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  The inventory’s importance to the valuation conclusion

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  The company’s write-down value

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  To the extent to which inventory accounting methods vary within particular industry

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  The amount of inventory data to be gathered
  
  

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  The amount of the expected prospective economic income in each period

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  The required rate of return (yield rate) by which the expected prospective economic income receipts should be discounted

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  Common equity

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  Economic income measured
  
  

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  The binomial model’s ability to incorporate a variety of conditions which can increase accuracy, including variations in expected volatility, dividends rates and risk-free discount rates as well as transaction costs.

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  The binomial model can be quite useful for valuing employee stock options as it is possible to include potential dilution, blackout periods, delayed vesting provisions, early exercise patterns and employee turnover in the model by increasing the number of periods and adjusting the
  option values at each node.

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  Binomial model does not require more computations

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  Binomial Model does not have any liquidity problem
  
  

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  Efficient markets

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  Special financing and other terms regarding each sales transactions

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  Age of each property

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  Supply and demand
  
  

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  The owner must hold the shares for at least one year

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  The reader should consult a tax advisor regarding any possible tax consequences

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  Business valuation professional is to estimate the fair market value

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  The ISO must have been granted at least two years before the stock is sold
  
  

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  The company’s future prospects

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  Indication of process continuous process delay

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  The company’s order blockage phenomenon

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  The future availability of suppliers
  
  

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  It should be subject to legal existence and protection

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  It should be subject to specific identification and recognizable description

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  It should be subject to right of private ownership

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  All of these
  
  

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  Realized and unrealized earnings

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  Short and long-term liabilities

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  Tangible and intangible assets

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  Unearned Revenues and fixed assets
  
  

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  Indirect capitalization rate

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  Direct capitalization rate

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  Normalized level of earnings

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  Tangible asset value
  
  

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  Liquidation of the stock of a disabled stockholder, either by the corporation or by other stockholder

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  Payment of estate taxes

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  Minimum interest rate based on U.S. Treasury rates

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  Provision for continuity of the business after loss of a key person
  
  

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  What are the nature and rate of technological changes affecting the industry?

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  How does it try to do the best job of fitting in its niche?

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  What special industry factors have a bearing on this particular company?

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  What is the progress and prognosis for new products or services, locations, channels of distribution, etc.?
  
  

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  Payouts (e.g. dividends, interest, security sales proceeds, or partnership withdrawals)

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  Cash flow (often measured as net cash flow)

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  The discount rate

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  Some measure of accounting earnings (often net income or net)
  
  

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  The community property standard, the investment value

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  The community property standard, the equitable distribution standard

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  The family property standard, the equitable standard

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  The standard value, the equitable distribution standard