AVA Exam Prep.pdf

The price at which property would change hands between a willing buyer and seller is called Fair market value.
The method used to minimize differences between closely held companies is Invested capital valuation method.
Factors considered for non-controlling ownership interest include Size of the block, Transaction activity, and Dividends.
The most frequently encountered reason for needing to value debt securities is All of the above, including Purchase or sale for cash, Exchange of equity for debt, and Allocating total enterprise value.
The theory stating fair market value equals the present value of future payments is not listed among the options.
The rate of interest producing a present value equal to a debt security's market price is called Yield to maturity.
Information needed to estimate a closely held debt security's value includes the amount and timing of future payments and the appropriate interest rate.
If a debt security's yield to maturity equals its coupon interest rate, its fair market value equals its face value.
A Call provision allows the debtor to repay the debt prior to maturity.
A Sinking fund provision requires the debt issuer to call or retire a portion of the debt issue periodically.
A debt security with no pledge of specific property as collateral is called a Debenture.