NACVA CVA Exam (page: 6)
NACVA Certified Valuation Analyst (CVA)
Updated on: 31-Mar-2026

Viewing Page 6 of 33

A unique feature of Merger stat/Shannon Pratt's control premium study is a transaction code by type of transaction. i.e.:

  1. F- Financial
    H-Horizontal integration
    V-Vertical integration
    C-Conglomerate
  2. F- Financial
    H-Hedged Value
    V- Vertical integration
    C- Corporations
  3. F- Funds
    H- Horizontal value
    V- Vertical value
    C- Control value
  4. C- Control and control risk
    H- Hedging
    F- Financial
    V-Vulnerability

Answer(s): A



"A takeover model became a significant explanatory variable for firms that had no cottail. A voting power model was a significant explanatory variable for firms that had cottail provision." This is the conclusion of:

  1. Robinson, Rumsey and white study
  2. Robinson, Richard and Black study
  3. Mergers stat/Shannon Pratt's control premium study
  4. Jeff, Jame and Chris study

Answer(s): A



About half the state and many individual companies have statutes or articles that require a super majority to effect certain corporate actions. If the minority block is of sufficient size to block such actions, there may be cause to reduce the discount for lack of control. In most cases, this would not be grounds for a sight reduction in the discount.
Which of the following term is related to this scenario?

  1. Swing vote
  2. Takeover
  3. Blocking power
  4. "Coattail" protection

Answer(s): C



Supermajority vote requirements and state dissolution statues are the factors that influence:

  1. Swing vote
  2. Blocking power
  3. Lack of control discount
  4. Ultimate rate of return produced by the interest.

Answer(s): C



Stockholders' privilege to subscribe to new issues of voting stock, usually the common stock or securities convertible into voting stock, usually the common stock or securities convertible into voting stock, before such offerings are made to non stockholders. This is called:

  1. A privileged subscription right
  2. A preemptive right
  3. Non-disclosure status
  4. Pre-offering status

Answer(s): A,B



If there are five directors to be elected, and 500 shares are outstanding and voting for the election of directors, the minimum number of shares necessary to elect one director would be 84 shares. Proof:
84 shares time five directors to be elected equals 420 votes, all cast for one director. Assuming the rest of the stock (416 shares) votes en bloc as the majority, such total of 2,080 votes distributed among five directors would be 416 votes each. Therefore, ndividual representing the minority and receiving its 420votes is sure to get one of the places on the board, the majority getting the other four places. The minority in this example must be sure to vote all of its 420 votes for one director; if it distributed the 420 votes among two, it obviously would not win any places on the board. Cumulative voting, move over, requires a majority of the stock to be able to elect a majority of the board. In the above example, five directors, ______________ shares are necessary, or a majority of the _____________ shares total.

  1. 200, 400
  2. 150, 300
  3. 251, 500
  4. 249, 500

Answer(s): C



If the language of the relevant agreements indicates that minority block of stock will be valued on a controlling ownership interest level of value, a full lack of control discount will not apply to the transactions to which the provision is applicable. For example:

  1. The agreement may say that the subject shares will be valued "on an enterprise basis" or as "a per share portion of the over all company value."
  2. A lack of control discount must be applicable to over all business value
  3. Lack of control discount may not be inflated due to influences of ownership control
  4. Some of the benefits of ownership control are lost due to public disclosure

Answer(s): D



1- _____________
1+ premium
This is a formula for:

  1. Converting a control premium
  2. Identifying a total of shareholders
  3. Converting a control premium to a market based premium
  4. Converting a control premium to an implied minority discount

Answer(s): D



Viewing Page 6 of 33



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