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NACVA Exam CVA Topic 6 Question 64 Discussion

Actual exam question for NACVA's CVA exam
Question #: 64
Topic #: 6
[All CVA Questions]

Which of the following is NOT out of the characteristics that must be present in a transaction while valuing recapitalizations and senior equity interests under Section 2701?

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Suggested Answer: D

by Jaclyn at Feb 04, 2023, 11:24 PM

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Linn
3 months ago
Wait, what's a 'recapitalization' again? Is that when you get your tires rotated and balanced?
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Vivan
2 months ago
C) The transaction must result in a transfer (directly or indirectly) between members of the family
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Adelle
2 months ago
B) The subject securities (both the retained senior preferred and transferred junior securities) must be non-publicly traded
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Sheridan
2 months ago
A) The retained security must be a class senior to the transferred junior security
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Jerilyn
3 months ago
I should've known D was the wrong answer. It's way too detailed to be the 'not out of the characteristics' option. Good thing I double-checked!
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Julian
1 months ago
User 4: Good thing we double-checked before submitting.
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Lisha
1 months ago
User 3: I picked A, and that was correct.
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Katy
1 months ago
User 2: Yeah, D is too specific for a 'not' option.
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Marta
2 months ago
User 1: I chose D too, but it's not the right answer.
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Donte
4 months ago
Aha! Option B is the one that's not a characteristic. Non-publicly traded securities? That's gotta be it.
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Cordelia
2 months ago
Exactly, that's the one that stands out as not necessary for valuing recapitalizations and senior equity interests under Section 2701.
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Edelmira
2 months ago
I agree, option B is the one that's not a characteristic. Non-publicly traded securities don't need to be present.
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Cristina
2 months ago
D) The transfer is a proportionate transfer of all senior and junior equity interests and, as mentioned the transferor must retain a senior equity interest.
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Carlota
3 months ago
C) The transaction must result in a transfer (directly or indirectly) between members of the family
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Louisa
3 months ago
B) The subject securities (both the retained senior preferred and transferred junior securities) must be non-publicly traded
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Destiny
3 months ago
A) The retained security must be a class senior to the transferred junior security
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Helga
4 months ago
Hmm, I'm not sure about this one. The wording is a bit confusing. Let me think this through again...
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Jina
3 months ago
B) The subject securities (both the retained senior preferred and transferred junior securities) must be non-publicly traded
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Lai
4 months ago
A) The retained security must be a class senior to the transferred junior security
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Jenifer
4 months ago
Hmm, that makes sense too. Let's discuss further to figure out the correct answer.
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Celestina
4 months ago
Option D seems a bit too specific to be the correct answer. I'm going with A - the retained security must be a class senior to the transferred junior security.
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Eleonore
5 months ago
I disagree, I believe the answer is A) The retained security must be a class senior to the transferred junior security.
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Jenifer
5 months ago
I think the answer is C) The transaction must result in a transfer between members of the family.
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