- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Valuation
- Learning Module 25. Private Company Valuation
- Subject 3. Definitions (Standards) of Value
CFA Practice Question
Which value definition is likely to result in several different valuation outcomes?
B. Investment value.
C. Intrinsic value.
A. Market value.
B. Investment value.
C. Intrinsic value.
Correct Answer: B
Investment value is based on an analysis of value to each individual buyer, and in most cases each potential buyer will offer a different price as a result of the individual outlook and synergies that each buyer brings to the transaction. Importantly, because investment value allows a prospective purchaser the ability to achieve or implement specific attributes that yield a higher value, investment value refers to a majority or control interest.
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