Free CVA sample questions
Real questions from the Certified Valuation Analyst practice bank, with the correct answer and an explanation for each one. No junk, no filler.
Try them in the simulator Same questions, with study, timed and flashcard modes.
Showing 10 of 20 free sample questions.
A CVA is valuing a privately-held company and has determined its enterprise value using a DCF analysis. To arrive at the value of common equity, the analyst must subtract all debt and debt-like items. Which of the following should be treated as a debt-like item and subtracted from the enterprise value? graph TD A[Enterprise Value (DCF)] --> B{Adjustments}; B -->|Subtract| C[Market Value of Debt]; B -->|Subtract| D[Debt-Like Items?]; C --> F[Equity Value]; D --> F;
In a valuation report, the reconciliation of value is the section where the analyst explains how different indications of value from various approaches were considered to arrive at a single conclusion of value. A common error in this section is to:
A consultant is using the Guideline Public Company Method to value a private construction firm. The consultant identifies several publicly traded comparables but notes that the private firm has significantly higher financial leverage (Debt/Equity ratio) than the public peers. What is the most appropriate next step for the consultant?
An analyst is valuing an early-stage biotechnology company with no current revenue but promising patented technology. The company will require several more years of significant cash burn before potential commercialization. Which valuation approach is generally MOST appropriate for this type of company?
When normalizing a company's income statement, a CVA identifies a one-time, non-recurring gain from the sale of a subsidiary. How should this gain be treated to properly reflect the company's sustainable earning power?
The Adjusted Net Asset Method is most likely to be the primary valuation method for which of the following entities?
A CVA is determining the Discount for Lack of Marketability (DLOM) for a minority interest in a stable, dividend-paying private company. The analyst is considering several empirical studies. Which type of study would likely provide the most relevant benchmark for this specific case?
A valuation firm is engaged to provide an opinion of value for a client's 20% ownership interest in a family business for estate tax purposes. The firm has full access to all company information and is free to apply any and all valuation methods deemed necessary. The partner in charge instructs the team to prepare a comprehensive report detailing their analysis and conclusion. Based on NACVA's Professional Standards, this engagement should be classified as a Valuation Engagement. The primary purpose is to establish the fair market value of the 20% interest as of the date of death. The subject company is a successful regional distributor of plumbing supplies with consistent profitability and moderate growth. The remaining 80% is owned by the decedent's siblings, who have no immediate plans to sell the company. The valuation team has performed an analysis using the Income Approach (Capitalization of Earnings) and the Market Approach (Guideline Public Company Method). They have also considered the Asset Approach but deemed it inappropriate given the company's nature as a profitable operating entity. The team must now address the characteristics of the ownership interest being valued. Which adjustments are necessary to move from a publicly-traded equivalent value (control, marketable level) to the fair market value of the subject 20% interest?
A CVA is valuing a company that recently spent a significant, non-capitalized amount on a failed R&D project. For normalization purposes, this expense should be ________ to determine the company's recurring earning power. Fill in the blank.
10 more free samples are waiting
Create a free account to unlock the whole CVA sample bank, or get full access to all 263 practice questions in the simulator.