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IFPUG Accredited in Business Valuation (ABV) Sample Questions:
1. 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, individual 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.
A) 249, 500
B) 251, 500
C) 200, 400
D) 150, 300
2. The court's acceptance, rejection, or relative weight
accorded to various valuation approaches and methods generally revolves around some factors. Which of the following are NOT out of those factors?
A) The type of company
B) The subject company's industry norms
C) The quality of available evidence relevant to the respective methods
D) The prospects for liquidation or continued operations
3. In many instances, value considerations are tempered by internal variables, often variables relative to specific shareholding as opposed to the company as a whole. Which of the following is NOT out of such variables?
A) Restrictive provisions affecting ownership rights
B) Size of the subject interest (reflecting not only magnitude but control issues)
C) Legal proceedings related to ownership or management prerequisites.
D) The right to vote and to impact the direction of the business
4. To get an explanation or interpretation of something on the financial statements, or to consult
working papers for details that augment the financial
statements,
it may be necessary to interview the company's outside independent accountant. This is most often the case when:
A) The financial statements are not audited
B) Contain some kind of unqualified opinion by the independent accountant
C) Not completely footnoted
D) Contain some kind of unqualified opinion by the attorney and banker
5. are excellent
sources
of statistical,
analysis ad projections of regional, national and international economic and financial conditions.
A) Economic summaries
B) Federal reserve bulletin
C) Bank reviews
D) Bank letters
Solutions:
Question # 1 Answer: B | Question # 2 Answer: B | Question # 3 Answer: C | Question # 4 Answer: A,C | Question # 5 Answer: D |