MCQs on OVERVIEW OR VALUATION Part No. 2

Q.1:- Which one of the following is covered In the valuation report?

• Valuation Methodologies
• Proposed Transaction
• Related Parties
• Share Holding Pattern

Q.2:- higher financial risk for equity holders implies greater volatility of:

• EBIT
• Corporate taxes
• EPS
• Sales

Q.3:- ..........is the estimated value of an asset or liability considering specific advantages or Disadvantage of either of the owner or identified acquirer or identified participants:

• Special Value
• Participant specific value
• Fair Value
• Intrinsic Value

Q.4:- Which of the following not provide authoritative guidance on fair value measurement

• ASC 820
• ASC 805
• IND AS 113
• IFRS 13

Q.5:- Valuations performed by Valuers for clients other than their employees is called as:

• Interested party valuation
• In-house valuations
• Third-party valuations,
• None of these

Q.6:- The valuation exercise and selection of valuation bases depend on the following:

• Scope and purpose of the valuation engagement
• Valuation date
• Nature of the asset to be valued
• All of the above

Q.7:- Valuer has to get the financial statements of the enterprise for past____toanalyze trends and any extra ordinary items:

• Three to five years
• One to two years
• Five years
• Two to five years

Q.8:- Caveats, limitation and disclaimers to the extent they explain or elucidate the limitation faced by valuer which shall not be for the purpose of limiting his……………for he Valuation report

• Applicability
• Scope
• Responsibility
• Availability

Q.9:- Post event in valuation means:

• Event after balance sheet date, may not be considered
• Event alter appointment of valuer, may not be considered .
• Event after the valuation report date, may not be considered
• Event after the valuation method, may not be considered

Q.10:- The methodology adopted for enterprise valuation is based on...................:

• Discounted cash flow
• Relative valuation
• Transaction multiple
• Any of the above

Q.11:- Which of the following procedure you would adopt while valuing nascent high-growth company?

• Start backward and work out the future
• Start from future and work backward
• Start backward
• Start from future

Q.12:- A commercial, industrial, service, or investment entity (or a combination thereof) pursuing an economic activity means:

• Business Valuation
• Business
• Business Enterprise
• Business Ownership Interest

Q.13:- For appropriate valuation:

• All valuation methods must be considered
• All valuation approaches must be considered
• All valuation methods must be applied
• All valuation approaches must be applied

Q.14:- Which of the following is a benchmark at which the estimate of value of an entity could be expressed by the Valuer:

• Business value
• Equity value
• Enterprise value
• All of the above

Q.15:- The intangible elements of Going Concern Value include:

• Procedures in place etc,
• Marketing systems
• None
• Both a & b

Q.16:- When valuation process is under multiple scenarios, you take into consideration,

• Ranges of value
• Scenarios
• Both (a) & (b)
• Any of the above

Q.17:- Scrape value =_- Total Depreciation

• Purchase price + Freight + Installation
• Purchase price + Freight
• Purchase price
• Purchase Price + Installation

Q.18:- The Fair Value accounting is based on the premise that assets have to be..........

• Mark to Market
• Mark to Myth
• Mark to Model
• None of the above

Q.19:- Replacement value refers to the actual cost that has to be incurred to replace an assets in its:

• Market condition
• Existing condition
• Both (a) and (b)
• Existing condition

Q.20:- _____IVS 104 deal with:

• Reporting
• Scope of work
• Bases of value
• Investigations and Compliance

Q.21:- .............................is the actual value of company based on fundamental analysis of qualitative quantitative factor and does not consider the Market value in any manner. It is measured as present value of future cash flows from an asset or company by using an appropriate disco rate:

• Special Value
• Intrinsic value
• Investment Value
• Fair value

Q.22:- _____is an estimate of the value of a business or business ownership interests, arrived at applying the valuation procedures appropriate for a valuation engagement and using professional judgment as to the value or range of values based on those procedures:

• 'Value
• Fair Value
• Cost
• Price

Q.23:- investment Value is the value to one particular investor and is a distorted price and will generally be____ than the market value:

• Higher
• Lower
• None
• Higher or Lower

Q.24:- Is the expected and estimated value the assets at the end of the its useful life:

• Market Value
• Assessed value
• Scrap value
• Book value

Q.25:- Refer to the subjective value that a person attributes to a particular product or service or asset that makes them feel good about owning the product;

• Exchange value
• Investment value
• Esteem value
• Replacement value

Q.26:- Synergies typically relate to a:

• An increase in revenue
• Reduction in risk.
• Reduction in costs
• All of the above

Q.27:- The traditional approach towards the valuation of a company assumes:

• that total risk is not altered by changes in the capital structure.
• that markets are perfect
• that there is an optimum capital structure.
• that the overall capitalization rate holds constant with changes in financial leverage.

Q.28:- Relative Valuation is popular as compared to DCF valuation because

• It can be used as a sanity check
• Easier to sell and defend
• It relies on multiples
• All the above

Q.29:- Which of the following includes in premises value:

• As is where is value
• Forced transaction
• Going concern value
• All of the above

Q.30:- Synergy is a term that is most commonly used in the context of:

• Acquisitions
• Mergers
• Both a and b
• Demerger

Q.31:- ____is the value attributable to the equity shareholders plus the value of debt and debt like items, minority interest, preference share less the amount of non-operating cash and cash equivalents:

• Business value
• Equity value
• Enterprise value
• All of the above

Q.32:- .......................involves valuing an assets based on market multiples derived from prices of market comparable traded on active market:

• Relief from Royalty (RFR) Method
• Comparable Companies Multiple Method
• Replacement Cost Method
• Comparable Transaction Multiple Method

Q.33:- A scope or work describes which of the following fundamental terms o fa valuation engagement, such as:

• The purpose of valuation
• The responsibilities of parties involved in the valuation.
• The assets being valued
• All of the above

Q.34:- Confirmation of client is important when determining the form and content of the report to ensure that it contains information relevant to their

• Purpose
• Requirement
• Need
• Any

Q.35:- Which of the following points need to be considered by a valuer in performing a assignment?

• Arrive at a value or a range of values
• Identify the subsequent events, if any
• Consider and apply appropriate valuation approaches and methods
• All of the above

Q.36:- In valuing a small geographically concentrated business, which of these types of economic data should be considered?

• National, regional, local
• Local only
• International, national, regional, local
• regional, local

Q.37:- Which of the following is the other qualitative characteristics of valuation report?

• Prudence
• Completeness
• Neutrality
• All of the above

Q.38:- The valuer shall state in his report the following:

• Procedures adopted in carrying out the valuation and the valuation standards followed
• Restrictions on use of the report, if any
• Nature and sources of the information used or relied upon,
• All of the above

Q.39:- Which of the following is included in safeguard measures to be taken by the valuer to ensure the correctness of the information provided by the client?

• The valuer shall mention the fact of management representation and the reliance placed the same in valuation report
• A valuer may obtain written representations from the management/client rear information for performing the valuation assignment
• None of the above
• Both a and b

Q.40:- A valuer shall obtain ______evidence in arriving at conclusion which form the basis of his valuation report:

• Sufficient and appropriate
• Reliable
• Comprehensive
• Reasonable

Q.41:- The divergence between Books value and market value is due to the reason

• Book value is historical
• Market rewards more
• The conventional balance sheet does not reflect value of intangible assets
• All the above

Q.42:- In tax valuations, values in buy / sell agreements are:

• determinative of value for estate tax purposes
• only a consideration for gift and estate tax purposes
• determinative for value for estate tax purposes and a consideration of value forgift tax purposes.
• determinative of value for gift tax purposes

Q.43:- Investment Value is the value to one particular investor and is a distorted price and will generally be higher than the

• Intrinsic value
• Special Value
• Market Value
• Fair value

Q.44:- Esteem value refer to the____ that a person attributes to a particular product or service or asset that makes them fed good about owning, the product:

• Subjective value
• Objective value
• None
• Both a and b

Q.45:- ..................is not Market Value as that is determined simply by dynamics of demand and supply between willing buyer and seller:

• Special Value
• Intrinsic value
• Market Value
• Fair value

Q.46:- ______means the indication of the type of value being used in an assignment:

• Liquidation base
• Going on base
• at Valuation base
• None

Q.47:- _____is the value to one particular investor and is a distorted price and will generally be higher than the market value:

• Intrinsic value
• Investment Value
• Special Value
• Fair value

Q.48:- Value of a firm is usually based on;

• The value of assets and liabilities
• The value of equity
• The value of debt and equity
• The value of debt

Q.49:- Forced sale is often used in following circumstances:

• Proper marketing period is not possible
• Buyer may not be able to undertake adequate due diligence
• Where a seller is under compulsion to sell
• All of the above

Q.50:- Employee stock option plan ("ESOP") valuation under lnd AS 102 is example of which of the following type of purpose of valuation:

• Strategic decision making
• Regulatory requirement
• Financial reporting
• None of the above