CEPA (CERTIFIED EXIT PLANNING ADVISOR) EXAM PREP – 270
QUESTIONS AND ANSWERS RATED 100% CORRECT DETAILED
ANSWERS
What are the disadvantages of an ESOP?
- ESOP can only pay Fair Market Value (lower price)
- Owners may not get 100% "cash out" at closing
- Must prepare for the current Regulatory Environment (DOL)
- Repurchase Obligation post-formation must be planned for
by the company
You can't do an ESOP without what?
A strong management team
Family issues affect which stools within the Value
Acceleration process?
All of them (business, personal, and financial)
What is a family enterprise?
Family business, entrepreneurial family, family firm, business
family, family company, private company/business, etc.
,During family transitions, you must ______________the interest
of the ownership and management team.
Align
If one of the clients has fear of conflict, as the Advisor, you
must do what?
You have to help them walk toward resolving it.
Fair does not mean _________________.
Equal
What makes a team effective?
Trust, conflict, commitment, and results
What trusted advisors are a part of the core (discover gate)
team?
CPA
Attorney
Financial Advisor
Insurance Advisor
Value Advisor
,What is the Organizing Principle for any exit planning team?
To align the three legs of the stool: business, personal, and
financial (this is the concept of "Mastering Planning")
Master Planning is the Organizing Principle
The Organizing Principle is the Three-Legged Stool
And the Three-Legged Stool is business, personal, and
financial
Every business trades within a _____________________.
Range of Value (ROV). Also known as Range of Multiple (ROM).
There is a range of multiple for every industry. A typical range
is as low as 3 and all the way up to 10x recasted EBITDA.
Your Attractiveness and Readiness Score determines what?
Where the company places on the Range of Value. The
high/lower the score, the higher/lower the multiple.
What is the Common Sense Scoring Scale used for?
To analyze a company's attractiveness & readiness
, Business readiness is determined by what?
Intangibles. The Four C's (Human, Structural, Customer, and
Social Capital) You will know if each of these are strong/weak
by using the Scoring Scale.
Why is the 1-6 range (no decimals) of the Common Sense
Scoring Scale important?
There is no average or middle ground; it forces the owner to
grade above or below average
How is personal readiness/preparedness rated?
Using the Common Sense Scoring Scale.
Ask these questions to give yourself a better idea of the
owner's score.
Is there a personal and estate plan?
Is there a personal vision/purpose?
Does the owner know their wealth goal?
Do they have a written personal plan?
Do they have a strong financial advisor?
What is the first major deliverable in the Discovery Gate?
QUESTIONS AND ANSWERS RATED 100% CORRECT DETAILED
ANSWERS
What are the disadvantages of an ESOP?
- ESOP can only pay Fair Market Value (lower price)
- Owners may not get 100% "cash out" at closing
- Must prepare for the current Regulatory Environment (DOL)
- Repurchase Obligation post-formation must be planned for
by the company
You can't do an ESOP without what?
A strong management team
Family issues affect which stools within the Value
Acceleration process?
All of them (business, personal, and financial)
What is a family enterprise?
Family business, entrepreneurial family, family firm, business
family, family company, private company/business, etc.
,During family transitions, you must ______________the interest
of the ownership and management team.
Align
If one of the clients has fear of conflict, as the Advisor, you
must do what?
You have to help them walk toward resolving it.
Fair does not mean _________________.
Equal
What makes a team effective?
Trust, conflict, commitment, and results
What trusted advisors are a part of the core (discover gate)
team?
CPA
Attorney
Financial Advisor
Insurance Advisor
Value Advisor
,What is the Organizing Principle for any exit planning team?
To align the three legs of the stool: business, personal, and
financial (this is the concept of "Mastering Planning")
Master Planning is the Organizing Principle
The Organizing Principle is the Three-Legged Stool
And the Three-Legged Stool is business, personal, and
financial
Every business trades within a _____________________.
Range of Value (ROV). Also known as Range of Multiple (ROM).
There is a range of multiple for every industry. A typical range
is as low as 3 and all the way up to 10x recasted EBITDA.
Your Attractiveness and Readiness Score determines what?
Where the company places on the Range of Value. The
high/lower the score, the higher/lower the multiple.
What is the Common Sense Scoring Scale used for?
To analyze a company's attractiveness & readiness
, Business readiness is determined by what?
Intangibles. The Four C's (Human, Structural, Customer, and
Social Capital) You will know if each of these are strong/weak
by using the Scoring Scale.
Why is the 1-6 range (no decimals) of the Common Sense
Scoring Scale important?
There is no average or middle ground; it forces the owner to
grade above or below average
How is personal readiness/preparedness rated?
Using the Common Sense Scoring Scale.
Ask these questions to give yourself a better idea of the
owner's score.
Is there a personal and estate plan?
Is there a personal vision/purpose?
Does the owner know their wealth goal?
Do they have a written personal plan?
Do they have a strong financial advisor?
What is the first major deliverable in the Discovery Gate?
