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QUESTION: 26

Accepted business valuation approaches and methods are all of the following EXCEPT:

Income approach
Asset-based approach
Guideling acquisition company approach
Market-based approach

Answer(s): C

There is a tendency for the market for the businesses to change more rapidly than the market for real estate. After all, a business can be thought of as a collection of___________ each with its own price volatility and risks of ownership.

Realized and unrealized earnings
Short and long-term liabilities
Tangible and intangible assets
Unearned Revenues and fixed assets

Answer(s): C

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QUESTION: 28

The use of asset-based approach should not be confused with the selection of the appropriate premise of value for the subject business valuation. Some analysts mistakenly confuse the use of asset-based approach with a liquidation premise of value (or with a liquidation valuation). Rather, the asset-based approach can be used with all premises of value including:

Value in use as a going-concern
Value as orderly disposition
Value as in exchange as part of a forced orderly liquidation
A, B and C

Answer(s): D

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QUESTION: 29

The capital stock of a corporation, its net assets and its share of stock are entirely different things… the value of one bears no fixed or necessary relation to the value of the other; because:

A share of common stock does not represent a share in the ownership of the assets of a business.
Share holders are only concerned with dividends
Only the corporation itself holds to all its assets and liabilities … A thirsty shareholder of brewery cannot walk into “his” company and demand that a case of beer be charged to his equity account
Putting capital in stocks is somewhat a risky investment

Answer(s): A,C

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QUESTION: 30

When is the guideline merged and acquired company method most useful?

The initial value derived from the guideline merged and acquired company method, before adjustment for factors such as size of subject block and degree of marketability, is an indication of transaction prices of major ownership interest, usually controlling ownership interests.
When same acquisition target has different buyers both due to perception and reality
At the time of achieving synergies
In estimation of enterprise value

Answer(s): A

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NACVA Accredited Valuation Analyst Exam AVA Dumps in PDF

Free NACVA AVA Real Questions (page: 6)

QUESTION: 26

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QUESTION: 30