NACVA Exam CVA Topic 2 Question 105 Discussion

Actual exam question for NACVA's CVA exam

Question #: 105
Topic #: 2

[All CVA Questions]

Buy-sell agreement may specify that the shares be valued strictly at their fair market value as:

AControlling ownership interests

BAt a proportionate share of the enterprise value with no discount of lack of control and/or no discount for lack of marketability

CAt a specified percentage discount from a proportionate share of total enterprise value

DBoth B & C

Show Suggested Answer

Suggested Answer: C

by Cristal at Jan 26, 2025, 02:14 AM

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Clay

1 months ago

The exam gods are really testing our understanding of business valuation here. Option B sounds like the 'fair' choice, but option C might be more realistic in the real world.

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Daren

1 days ago

I agree, option B is ideal but option C might be more common in actual buy-sell agreements.

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Oliva

2 days ago

It's true, option B seems fair but option C could be more realistic in practice.

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Nadine

3 days ago

I think option B makes sense in theory, but option C might be more practical.

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Chaya

1 months ago

As an accountant, I'd say option C is the way to go. A specified percentage discount is a more practical approach than trying to determine a 'fair' value.

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Larue

1 months ago

Haha, I guess the shareholders are trying to have their cake and eat it too with option D. Can't decide on fair market value or a discount? Why not both!

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Stanford

3 days ago

User 1: Yeah, option D seems like they want the best of both worlds.

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Isaac

1 months ago

I'm torn between B and D. The absence of discounts for lack of control or marketability makes sense, but a specified percentage discount could also be reasonable.

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Remedios

11 days ago

That's true. D does cover all possibilities. It might be the safer choice.

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Barney

13 days ago

I see your point, but D could also work. It includes both options, so it covers all bases.

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Flo

1 months ago

I think B makes more sense. No discounts for lack of control or marketability.

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Lilli

2 months ago

Option B seems like the most logical choice, as it specifies the shares should be valued at a proportionate share of the enterprise value without any discounts.

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