Section 1 - Instruction

We've covered the 'what' and 'how' of valuation. Now let's focus on the 'who' and 'when'. Choosing the right method and the right professional is crucial for a credible outcome. Let's practice making these critical judgments.

Engagement Message

What's one factor that determines who should perform a valuation?

Section 2 - Practice

Type

Sort Into Boxes

Practice Question

Match the valuation task to the professional who typically leads it.

Labels

  • First Box Label: Investment Banker
  • Second Box Label: Cert. Appraiser

First Box Items

  • Company IPO
  • M&A Deal
  • Raising capital
  • Strategic sale

Second Box Items

  • Tax dispute
  • Divorce case
  • Estate settlement
  • Shareholder dispute
Section 3 - Practice

Type

Swipe Left or Right

Practice Question

Which valuation driver is most central to each approach? Swipe left for Asset/Market drivers and right for Income drivers.

Labels

  • Left Label: Asset / Market
  • Right Label: Income

Left Label Items

  • The liquidation value of machinery
  • The recent sale price of a rival firm
  • The current market value of real estate
  • Public company trading multiples

Right Label Items

  • Future cash generation potential
  • Long-term subscription revenue streams
  • The riskiness of future earnings
  • Projected profitability over 5 years
Section 4 - Practice

Type

Multiple Choice

Practice Question

A court requires a 'defensible, objective' valuation for a shareholder dispute. Which professional is best suited for this?

A. The company's CEO B. An investment banker focused on deals C. A certified business appraiser D. A stock market analyst

Suggested Answers

  • A
  • B
  • C - Correct
  • D
Section 5 - Practice

Type

Fill In The Blanks

Markdown With Blanks

The process of using multiple valuation methods to arrive at a more confident value range is called [[blank:triangulation]].

It helps to [[blank:cross-check]] the results from different perspectives, such as comparing an asset-based value to a [[blank:market-based]] value.

Suggested Answers

  • triangulation
  • cross-check
  • market-based
  • estimation
  • projection
Section 6 - Practice

Type

Multiple Choice

Practice Question

You are valuing a private, profitable software company with stable cash flows but no good public comparables. Which approach is the most logical starting point?

A. Asset-based, focusing on its computers and servers. B. Market-based, by using comps from a different industry. C. Income-based, by projecting its future cash flows. D. None, valuation is impossible without public comps.

Suggested Answers

  • A
  • B
  • C - Correct
  • D
Previous
Sign up
Join the 1M+ learners on CodeSignal
Be a part of our community of 1M+ users who develop and demonstrate their skills on CodeSignal