CVA

CVA practice questions, page 7 of 10, with answer review and explanations.

Question 31

Control transaction valuation multiples (often called deal multiples or acquisition multiples or acquisition multiples) often use the following measures of returns in the denominator EXCEPT:

  1. Revenues
  2. Operating income available to invested capital [earnings before interest and taxes (EBIT)]
  3. Intangible book value
  4. Discretionary earnings

Question 32

In merger market valuation models:

  1. We compare prices among similar companies, much like comparison shopping for a consumer item among similar retail stores
  2. Corporations are not yellow pencils, quickly stacked and easily matched
  3. Every M&A sale cannot be considered special or extraordinary
  4. M & A market mostly evinces aberrations

Question 33

As with any secondary sources, errors and inconsistencies occur, so the original source documents are the only guarantees of absolute accuracy as a source of merger and acquisition data. Which one of the following is NOT out of those original source documents?

  1. Mergerstat Review
  2. The merger yearbook
  3. Buyouts, published every other week by securities data publishing
  4. Financial reports

Question 34

1. Pratts stats 2. Done deal 3. Bizcomps 4. IBA market database These are the four databases devoted to:

  1. Middle-market
  2. Small company controlling ownership
  3. Middle market and small company controlling ownership interest transactions
  4. Shareholders’ equity

Question 35

Documentable, arms-length, bona fide offers to buy or sell may also be useful evidence of value. Funded bona fide offers (i.e. offers for which the financing for the offer is already in place) should be gives more weight and more consideration than:

  1. Past subject company changes
  2. Merger and acquisition offers
  3. Unfunded bone fide offers
  4. Past acquisition documents by the subject company