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Financial Valuation Workbook: Step-by-Step Exercises and Tests to Help You Master Financial Valuation, 3rd Edition by Michael J. Mard, James R. Hitchner

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Chapter 3

Financial Valuation: Applications and Models Companion Exercises and Test Questions

This chapter comprises exercise and test questions taken from the book Financial Valuation: Applications and Models, Third Edition. You should read the book, answer the questions, and then proceed to the Answer Grid of this chapter. Good luck! The reader should note that questions are grouped according to chapter and similar subject matter but do not necessarily follow the chapter order of FVAM.

CHAPTER 1: INTRODUCTION TO FINANCIAL VALUATION

Note: Select the best answer(s) from the list of multiple choice questions. Some multiple choice questions have only one correct answer and some have several correct answers. Do not assume each question has only one correct answer. Circle the correct answer(s) for each question.

1. Which of the following is/are a purpose of a valuation?

a. Income tax

b. Divorce

c. Corporate planning

d. Litigation

e. Going-concern value

f. Fair market value

2. Which of the following is/are considered a type of interest in a business that can be valued?

a. 100 percent control

b. 50 percent interest with one other 50 percent owner

c. Minority

d. Majority without control

e. Minority with control

3. Articles of incorporation and bylaws are seldom useful in determining value.

a. True

b. False

4. Name the five organizations that have adopted the International Glossary of Business Valuation Terms.

1.

2.

3.

4.

5.

5. Relying on the wrong standard of value can result ...

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