Question 1

The discount rate is a market-driven rate. It represents the expected yield rate-or rate of return-necessary to induce:

Options :

A : Investors to commit available funds to the subject investment, given its level of risk

B : Yield rate

C : Dividends

D : Investment yield

Answer: A

Question 2

There is a general consensus among appraisers that there is little or no difference in controlling interest market values between S corporations and C corporations under most circumstances, and that any difference depends on:

Options :

A : Finding a seller that there may be differences in value at the shareholder level for noncontrolling interests.

B : Finding a buyer that there may be differences in value at the shareholder level for noncontrolling interests.

C : Finding a dealer that there may be differences in value at the shareholder level for non- controlling interests.

D : Finding a broker that there may be differences in value at the shareholder level for non- controlling interests.

Answer: B

Question 3

The most frequently encountered reasons for needing to value debt securities are the following EXCEPT:

Options :

A : Purchase or sale for cash

B : Exchange of equity for debt, or vice versa

C : Allocating total enterprise value among classes of securities in a leverages buyout, recapitalization (including)

D : Adjusting an equity statement owned or owed

Answer: D

Question 4

Market evidence indicated that adjustable-rate preferred stocks generally required yields in the range of ______________ basic points.

Options :

A : 42 to 445

B : 48-498

C : 32-500

D : 50-500

Answer: A

Question 5

Which one of the following is/are example/s of normalizing adjustments?

Options :

A : Adequacy of allowance and reserve accounts

B : Non-depreciation methods and schedules

C : Policies regarding capitalization or expensing of various costs (adjust to industry norms)

D : Changes in capital structure

Answer: A,C