CEPA Exam 2025 – Study Questions and Accurate Solutions Guide

CEPA EXAM STUDY QUESTIONS AND
ACCURATE SOLUTIONS 2025 GUIDE.
A sale to ______________________ can be very complex with approximately
1,000 professional hours.
a third party
A _______________________ is expensive relative to benefit
recapitalization
In a _____________________, there is no money for goodwill.
orderly liquidation
In a __________________________ there are uncertain proceeds, no
guarantee.
orderly liquidation
_____% of small businesses are family controlled.
90
There are essentially _______________ options for selling a small business.
seven
Buy-sell are usually _______________ and _______________________.
poorly written, underfunded
Buy-sell agreement should show how much _______________ an owner
has for selling and for any ______________ events.
leverage, trigger
Buy-sell agreements typically have a ________________ sales price.

,lower
Buy-sell agreements may ______________________ your options.
limit
Sale to employees using an ESOP is underutilized because owners are not
________________________________.
educated about the option
Sale to employees is _____________________ using an ESOP because
owners are not educated about the option.
underutilized
An ESOP is generally suited for a ______________________ exit.
gradual
________________________________ is when an owner sells the business to
a strategic buyer, financial buyer, or private equity group through a
negotiated sale, controlled auction, or unsolicited offer.
sale to a third party
______% of business owners have no transition team.
78
______% of business owners have no written transition plan.
83
Half of business owners need the company to remain profitable, yet
______% have not done strategic review or a value growth project.
86
Adding an investment banker to the sales process can add
________________________________ to the sales price.

,a turn or two turns
________________________ is finding new ways to "fund the company's
balance sheet." Essentially brings in a lender or equity investor to act as a
partner in the business. Can sell minority or majority position.
recapitalization
__________________________ is a leverage option.
recapitalization
__________________________ is a partnering option.
recapitalization
Orderly liquidation tends to lead to higher tax due to being
___________________ rather than ____________________, and is likely to be
______________________.
an asset sale rather than a stock sale, and is likely taxed twice.
Timing strategies ______________ recommended. The wise business
owner is ______________ ready by making the business
_____________________.
are not, always, present tense
The three legs of the private equity stool:
company, management, deal
For private equity, looking at companies, what are the categories for the
business model?
service, distribution, manufacturing
For private equity, how does the company make money?

, Sustainability, defensible market position,
competitive advantages
Growth opportunities in private equity include:
money, people, technology, new end markets
Identifying risks & weaknesses in private equity:
money, people, technology, market, customers
Private equity has ____________ years to invest cash received from
investors.
five
Historic private equity IRR range was ____% to _____%. Currently _____%
to ____%
18, 28, 10 12
In private equity, in a __________ sale you would assume risk of liabilities,
law suits, etc.
stock
In private equity, the time with the most debt and most fragile state is
_______________________.
at the beginning
In private equity, __________ sale would allow for a step up in basis.
asset
In private equity, ______________ sale will allow for full depreciation in the
first year.
asset