CAIIB – ABFM – Mock Test- 03
Hello Student
Welcome and congratulations on deciding to use this Quiz!!
Successfully answering the questions will improve your understanding of the concept and help you score better in your exam.
IMPORTANT NOTE : Pl click all questions, so that you can see correct / incorrect status of you attempted test
Here is your Test…….. All the best
1.
What is the primary reason why startups seek funding from various sources, including venture capitalists?
2.
How does the anticipated growth rate of cash flows in the real estate market relate to the rate of inflation? A) Anticipated growth rate of rentals is usually higher than the rate of inflation in tight markets with low vacancy rates. B) The rate of inflation directly determines the anticipated growth rate of rentals in the real estate market. C) Anticipated growth rate is independent of inflation in the real estate market. D) In markets with high vacancy rates, the anticipated growth rate of rentals is typically lower than the rate of inflation
3.
Why are convertible debentures and debentures with warrants commonly used?
4.
When a target company does not wish to be purchased, what professionals might they seek assistance from to fend off potential acquirers?
5.
Why might some analysts argue that traditional risk and return models are not appropriate for estimating the cost of equity for real estate investments?
6.
What is the purpose of making adjustments in corporate valuation when analyzing financial statements of comparable companies?
7.
What are the challenges and issues associated with the asset-based valuation approach ? A) Obtaining accurate market values for assets on the balance sheet may be difficult. B) Market values may not accurately reflect the true value of assets due to market inefficiencies. C) The value of an asset in the market may not be the same as its value in the company's specific use. D) Identifying and appraising omitted assets, particularly intangible assets, can be challenging.
8.
Why might companies be hesitant to lay off excess personnel as a solution to inefficiencies in their operations?
9.
What is the term used to describe a situation where only one firm is involved in a scheme, and the rights of the owners and creditors are altered?
10.
How is the discount rate determined in discounted cash flow valuation, and how does it relate to the risk associated with an asset?
11.
Which of the following are post-offer anti-takeover defenses? A) Greenmail B) Pacman defense C) Poison Pills D) Litigation
12.
What is one reason for the widespread use of the P/B multiple?
13.
What is the potential consequence of shareholders of the target company being subject to double taxation?
14.
What is considered the most reliable source for estimating growth rates in a valuation method?
15.
What is the role of a Category I merchant banker in the takeover process?
16.
When considering the selection of the acquisition vehicle and post-closing organization in an M&A deal, which factors should be taken into account? A) Cost and formality of the organization B) Ease of ownership transfer C) Continuous existence of the organization D) Management control
17.
What are the steps involved in valuing a company using the discounted cash flow (DCF) approach, and what is analyzed in the first step of this process? A) The first step involves analyzing the market's response to the company's past performance B) The steps include analyzing historical performance, calculating Free Cash Flow, determining the weighted average cost of capital (WACC), forecasting future cash flows, finding the terminal value, and considering the value of non-operating assets C) In the first step, historical performance is analyzed to calculate operating invested capital, net operating profit less adjusted taxes (NOPLAT), return on invested capital (ROIC), and net investments. D) The first step focuses on forecasting future cash flows for the explicit forecast period.
18.
How does the investor interest in preference capital fluctuate with changing taxation laws?
19.
How are debtors typically valued, especially when their creditworthiness is in question?
20.
What sources of information are typically considered when determining the worth of a company for valuation purposes? A) The company's history and earnings. B) Industry averages and peer group comparisons. C) Profitability of a company's investments and reinvestment. D) Current Prices of the company's products.
DO NOT CLICK ‘SUBMIT’ BUTTON, WITHOUT READING THE FOLLOWING
1) Answers shall appear when you click ‘SUBMIT’ button, below.
2) If answer given by you is correct, it will be shown in GREEN font.
3) If answer given by you is incorrect, it will be shown in RED Font in addition to correct answers shown in GREEN Font.
4) If you want to improve your score, we suggest you to practice the following QUESTION BANK after revising the concepts.