Advanced D P Chapter Four Review Questions
Advanced Discounts and Premiums
NONVOTING VERSUS VOTING INTERESTS
ADVANCED DISCOUNTS AND PREMIUMS CHAPTER 4 REVIEW QUESTIONS
© 2003–2014 Robert J. Grossman and National Association of Certified Valuators and Analysts 2014.v1
Chapter Four – 5
NONVOTING VERSUS VOTING INTERESTS
Advanced Discounts and Premiums
ADVANCED DISCOUNTS AND PREMIUMS CHAPTER REVIEW QUESTIONS Chapter 4: Nonvoting Versus Voting Interests 1.
The studies done to determine the value differential between voting and nonvoting interests in shares of stock provides useful guidance in valuing small closely held businesses or privately held, familyowned businesses. a. b.
2.
In a business valuation of a company with both voting and non-voting stock, what is one of the most important considerations in determining the value of the voting rights and the respective equity instruments? a. b. c. d.
3.
True False
Whether or not the number of preferred shares issued and outstanding is greater than or equal to the number of common shares issued and outstanding The total number of common shares issued and outstanding and the total number of preferred shares issued and outstanding The overall capital structure of the company The guidance provided by studies as to the value differential between voting and nonvoting shares
Several studies have studied the existence and size of a voting rights value differential. In most studies, such a differential is under 5%. The study that found a value differential above 5% was: a. b. c. d.
SEC Institutional Investor Study Lease, McConnell, and Mickelson Study Coolidge Study O’Shea and Siwicki Study
6 – Chapter Four
© 2003–2014 Robert J. Grossman and National Association of Certified Valuators and Analysts 2014.v1
NONVOTING VERSUS VOTING INTERESTS
ADVANCED DISCOUNTS AND PREMIUMS CHAPTER 4 REVIEW QUESTIONS
© 2003–2014 Robert J. Grossman and National Association of Certified Valuators and Analysts 2014.v1
Chapter Four – 5
NONVOTING VERSUS VOTING INTERESTS
Advanced Discounts and Premiums
ADVANCED DISCOUNTS AND PREMIUMS CHAPTER REVIEW QUESTIONS Chapter 4: Nonvoting Versus Voting Interests 1.
The studies done to determine the value differential between voting and nonvoting interests in shares of stock provides useful guidance in valuing small closely held businesses or privately held, familyowned businesses. a. b.
2.
In a business valuation of a company with both voting and non-voting stock, what is one of the most important considerations in determining the value of the voting rights and the respective equity instruments? a. b. c. d.
3.
True False
Whether or not the number of preferred shares issued and outstanding is greater than or equal to the number of common shares issued and outstanding The total number of common shares issued and outstanding and the total number of preferred shares issued and outstanding The overall capital structure of the company The guidance provided by studies as to the value differential between voting and nonvoting shares
Several studies have studied the existence and size of a voting rights value differential. In most studies, such a differential is under 5%. The study that found a value differential above 5% was: a. b. c. d.
SEC Institutional Investor Study Lease, McConnell, and Mickelson Study Coolidge Study O’Shea and Siwicki Study
6 – Chapter Four
© 2003–2014 Robert J. Grossman and National Association of Certified Valuators and Analysts 2014.v1
