HALO HALONG VALUATION - REVIEW

Question 1

pertains to how much a particular object is worth to a particular set of eyes.

a. Price
b. Value
c. Cost
d. Fundamentals

Answer 1

B

Question 1

According to the CFA Institute, it is the estimation of an asset’s value based on variables perceived to be related to future investment returns, on comparisons with similar assets, or, when relevant, on
estimates of immediate liquidation proceeds

a. Valuation
b. Price Estimation
c. Fundamentals
d. Appraisal

Answer 1

A

Question 2

Valuation places great emphasis on the ___ that are associated in the exercise.

a. Professional judgment
b. Human reasoning
c. Professional Skepticism
d. Due diligence

Answer 2

A

Question 3

The value of a businesses can be basically linked to three major factors, except.

a. Current Operations
b. Future Prospects
c. Embedded Risks
d. None of the above

Answer 3

D

Question 4

One major factor linked to the value of business that shows how is the operating performance of the
firm in the recent year.

a. Current Operations
b. Future Prospects
c. Embedded Risks
d. All of the above

Answer 4

A

Question 5

One major factor linked to the value of business that reflects what is the long-term and strategic decision of the company.

a. Current Operations
b. Future Prospects
c. Embedded Risks
d. All of the above

Answer 5

B

Question 6

One major factor linked to the value of business that shows what are the business risks involved in running the business

a. Current Operations
b. Future Prospects
c. Embedded Risks
d. All of the above

Answer 6

C

Question 7

refers to the value of any asset based on the assumption assuming there is a hypothetically
complete understanding of its investment characteristics

a. Going concern value
b. Liquidation Value
c. Intrinsic Value
d. Fair Market Value

Answer 7

C

Question 8

particularly relevant for companies who are experiencing severe financial distress.

a. Going concern value
b. Liquidation Value
c. Intrinsic Value
d. Fair Market Value

Answer 8

B

Question 9

Value is determined under the going concem assumption.

a. Going concern value
b. Liquidation Value
c. Intrinsic Value
d. Fair Market Value

Answer 9

A

Question 10

The price, expressed in terms of cash equivalents, at which property would change hands between a hypothetical willing and able buyer and a hypothetical willing and able seller, acting at arm’s length in an open and unrestricted market, when neither is under compulsion to buy or sell and when both have reasonable knowledge of the relevant facts.

a. Going concern value
b. Liquidation Value
c. Intrinsic Value
d. Fair Market Value

Answer 10

D

Question 11

The relevance of valuation in ___ largely depends on the investment objectives of the investors or financial managers managing the investment portfolio.

a. Portfolio Management
b. Fundamental Management
c. Financial Management
d. Investment Management

Answer 11

A

Question 12

These are persons who are interested in understanding and measuring the intrinsic value of a firm.

a. Fundamental Analysts
b. Activist Investors
c. Chartists
d. Information Traders

Answer 12

A

Question 13

refer to the characteristics of an entity related to its financial strength, profitability or risk
appetite.

a. Intrinsic Value
b. Fundamentals
c. Technical Characteristics
d. Financial Value

Answer 13

B

Question 14

tend to look for companies with good growth prospects that have poor management.

a. Fundamental Analysts
b. Activist Investors
c. Chartists
d. Information Traders

Answer 14

B

Question 15

They believe that these metrics imply investor psychology and will predict future movements in stock prices

a. Fundamental Analysts
b. Activist Investors
c. Chartists
d. Information Traders

Answer 15

C

Question 16

The underlying belief is that _______ are more adept in guessing or getting new information about
firms and they can make predict how the market will react based on this. Hence, _____correlate value
and how information will affect this value

a. Fundamental Analysts
b. Activist Investors
c. Chartists
d. Information Traders

Answer 16

D

Question 17

Under portfolio management, the following activities can be performed through the use of valuation techniques, except

a. Stock Selection
b. Deducing Market Expectation
c. Both can be performed
d. None of the above

Answer 17

C

Question 18

Separating a segment or component business and transforming this into a separate legal entity
whose ownership will be transferred to shareholders.

a. Mergers
b. Acquisitions
c. Divestiture
d. Spin-off

Answer 18

D

Question 19

Sale of a major component or segment of a business (e.g. brand or product line) to another company

a. Mergers
b. Acquisitions
c. Divestiture
d. Spin-off

Answer 19

C

Question 20

General term which describes the transaction two companies combined to form a wholly new entity

a. Mergers
b. Acquisitions
c. Divestiture
d. Spin-off

Answer 20

A

Question 21

usually has two parties: the buying firm and the selling firm. The buying firm needs to
determine the fair value of the target company prior to offering a bid price. On the other hand, the selling
firm (or sometimes, the target company) should have a sense of its firm value as well to gauge
reasonableness of bid offers.

a. Mergers
b. Acquisitions
c. Divestiture
d. Spin-off

Answer 21

B

Question 22

. Acquisition of another business by using significant debt which uses the acquired business as a collateral.

a. Mergers
b. Acquisitions
c. Divestiture
d. Leveraged buy-out

Answer 22

D

Question 23

Assumes that the combined value of two firms will be greater than the sum of separate firms.
______ attributable to more efficient operations, cost reductions, increased revenues, combined products/markets or cross-disciplinary talents of the combined organization.

a. Synergy
b. Control
c. Synergy and Control
d. None of the above

Answer 23

A

Question 24

deals with prioritizing and distributing financial resources to activities that increases firm value. The ultimate goal is to maximize the firm value by appropriate planning and implementation of resources, while balancing profitability and risk appetite. a. Financial Management b. Corporate Finance c. Risk Management d. Portfolio Management

Answer 24

B

Question 25

Generally, the valuation process considers these steps, except a. Understanding the Business b. Forecasting Financial Performance c. Preparing Valuation model based on forecasts D. All of the above

Answer 25

D

Question 26

Which key principles in valuation refers to Business value tend to change every day as transaction happens? a. The value of a business is defined only at a specific point in time b. Value varies based on the ability of business to generate future cash flows c. Firm value can be impacted by underlying net tangible assets d. Market dictates the appropriate rate of return for investors

Answer 26

A

Question 27

refers to the possible range of values where the real firm value lies. a. risk of the unknown b. volatility c. uncertainty d. None of the above

Answer 27

C

Question 28

Which key principles in valuation refers to Market forces are constantly changing, and they normally provide guidance of what rate of return should investors expect from different investment vehicles in the market? a. The value of a business is defined only at a specific point in time b. Value varies based on the ability of business to generate future cash flows c. Firm value can be impacted by underlying net tangible assets d. Market dictates the appropriate rate of return for investors

Answer 28

C

Question 29

The key principles in valuation refers to general concepts for most valuation techniques put emphasis on future cash flows except for some circumstances where value can be better derived from asset liquidation is a. The value of a business is defined only at a specific point in time b. Value varies based on the ability of business to generate future cash flows c. Firm value can be impacted by underlying net tangible assets d. Market dictates the appropriate rate of return for investors

Answer 29

A