CEPA (Certified Exit Planning Advisor) FINAL EXAM REVIEW 2025/2026 COMPLETE QUESTIONS WITH CORRECT DETAILED ANSWERS || 100% GUARANTEED PASS <BRAND NEW VERSION>

CEPA (Certified Exit Planning Advisor) FINAL EXAM REVIEW 2025/2026 COMPLETE QUESTIONS WITH CORRECT DETAILED ANSWERS || 100% GUARANTEED PASS &lt;BRAND NEW VERSION&gt; 1. What survey indicated that 99% of business owners at least in some way agreed that "having a transition strategy is important for my future and the future of my business?" - ANSWER State of Owner Readiness 2. A retirement cash flow plan, which details the amount of, additions to and uses of investment assets, is most accurate when the following is used in the analysis - ANSWER Statistical modeling 3. If estate is less than $5 million ($10 million for a married couple), do I still need estate planning? - ANSWER YES 4. What is the primary objective for most irrevocable trusts or Family Limited Partnerships? - ANSWER A. Remove the business (or other asset) and future appreciation out of the estate 5. Which of the following is NOT considered an advantage of Family Limited Partnership? - ANSWER Assets are contributed at fair market value 6. Asset protection is a continuum that includes balancing equity, asset, and jurisdictional changes (T/F) - ANSWER A. true 7. In 2016 charitable gifts exceeded what dollar amount? - ANSWER $350 BILLION 8. What percentage of entrepreneurs donate money to charities - ANSWER 90% 9. What are the two most highly valued gifts made to foundations /trusts/charitable organizations? - ANSWER d. Business or business stock and real estate 10. of the 250,000 US companies with $5M to $100M in revenue set to transition by 2030, how many will actually sell for desired value? - ANSWER b. 14,000 11. What is the timeframe most private companies can increase their value and should begin their value growth? - ANSWER d) three to five years 12. What is business road-mapping? - ANSWER Periodic assessment of a business enterprise and development of prioritized initiatives to strengthen the business 13. In the value growth process, the advisor should encourage their business owner client to focus primarily on - ANSWER a. internal and external qualitative growth factors 14. In what gate would you utilize a business valuation? - ANSWER gate 1 (Discover) 15. What would be considered a mid-range business attractiveness score? - ANSWER c.57% (remember that 65% is good) 16. In Gate 2, what deliverables could you use? - ANSWER A. Master plan, validation, five business action items 17. In what gate would you utilize an exit options analysis and keep or sell decision? - ANSWER C. Gate 3 18. Creating a business valuation plan is the same process or formula for every business (T/F) - ANSWER b. False 19. In the income approach to business valuation, which method is predicated on a specific future look at economic benefits? - ANSWER c. discounted cash flow method 20. The three schools of business valuation include: - ANSWER A. Investment banking, formal FMV, and smallest companies rule of thumb (this question sucks, like a thumb, so look for the thumb to suck in the answers) 21. What are the four key components of relentless execution? - ANSWER Vision, Alignment, Accountability, Rhythm 22. Which of the following are implications of a business owner not achieving his or her objectives? - ANSWER a. Failure to achieve financial security b. Loss of control over exit timing c. Both A and B 23. Which is not a characteristic of a SMART goal? - ANSWER Cost effective 24. When managing a strategic referral relationship, one strategy for success is: - ANSWER Developing a mini-business plan for the relationship with clearly stated short and long-term goals 25. If a business owner gifts closely held stocks to public charity/donor advised fund, what would the likely charitable deduction be? - ANSWER The fair market value of the stock of which all can be deductible up to 30% of the donor's adjusted gross income this year (and subject to a five year carry forward) 26. The most influential reason why a public company might be valued three to five times higher than a "comparable" private company is: - ANSWER A public company has a cost of capital that is only 1/5 - 1/3 of a private company 27. After you finish the personal, financial, and business readiness and attractiveness interview with the business owner during the Discovery phase of the value acceleration process, what should you do - ANSWER Use the scores to justify where the business places in the range of value, determined in the business valuation 28. Which of the following is not an advantage of a stock sale to a seller? - ANSWER Reduces the number of representations and warranties given 29. Which of the following Exit Planning Teams would be best given the following facts: A 63-year-old business owner has his three adult children in the business. The business generates $5 million in EBITDA and has a solid management team composed of his children and three others. The owner has $6 million in life insurance. The owner is terminally ill and needs to arrange a sale or other ownership transition within 12 months. - ANSWER Trust and Estate Lawyer, Financial Planner, CPA 30. What taxes can potentially be reduced if the business owner gifts shares of the company to a charity? - ANSWER Ordinary income, capital gains, gift tax, estate tax 31. Which of the following is not one of the eight common money types? - ANSWER Sorcerer 32. Which of the following actions are most likely addressed in the first or second cycle of the Prepare stage? - ANSWER Key employees, contracts, safety program 33. You are the accountant for a client planning to sell their company; you have reviewed the financial statements and have gone through the most likely exit options with the client. You brought in a M&A professional, but they said that it is not the right time yet. What are the first two steps that must be completed by you, the M&A professional, or another Exit Planning Advisor professional before a M&A professional can successfully market the company? - ANSWER A valuation and business, personal, and financial assessment 34. The organizing principle of an effective exit planning team is concentrating on enterprise value. (t/F) - ANSWER False 35. Which of the following is not a reason why a successful company fails to sell? - ANSWER Having multiple buyers involved in the process 36. Why are workshops a more effective communication tool than meetings? - ANSWER Workshops are more collaborative 37. What taxes can potentially be reduced if the business owner gifts shares of the company to a charity? - ANSWER Ordinary income, capital gains, gift tax, estate tax 38. A private equity firm will use which financing combination to complete a transaction? - ANSWER Unable to tell, it is based upon the particular business transaction 39. A "C" Corporation is the best format to optimize the net proceeds from a transaction. (t/f) - ANSWER FALSE 40. Which of the following statements about estate planning is false? - ANSWER Estate planning is concerned with analyzing and planning for the business owner's personal, financial, and professional controlled departure from the business 41. According the Exit Planning Institute State of Owner Readiness Survey, what percentage of owners had no written transition plan? - ANSWER 83% 42. A business you are working with is doing $20,000,000 in gross sales and adjusted EBITDA is 10% to sales. Based on this financial performance and the personal, financial, business assessment recently completed, it has been determined the market multiple for this business is 5x adjusted EBITDA. Best in class companies in this industry are performing at 15% adjusted EBITDA to sales and are trading at 8x adjusted EBITDA. What is this company's value gap? - ANSWER $14,000,000 43. What is one disadvantage of a sale to a third party? - ANSWER Can take nine to 12 months to complete 44. Which professional advisor do business owners consult the most for advice on philanthropy? - ANSWER Accountant 45. Your client is 50 years old and has owned the business for 10 years. The owner's partner is 60 years old. The owner has three children, but none of them are involved in the business. The business has a strong management team and good employee tenure. The growth trend is up. The industry is attractive, and the private capital market is good. The business accounts for 90% of the owner's net worth. Which group of exit options should this owner consider? - ANSWER ESOP, sale to management, sale to strategic buyer 46. For a ___________________________________ the owner sells the business to a strategic buyer, financial buyer, or private equity group through a negotiated sale, controlled auction, or unsolicited offer. - ANSWER sale to a third party 47. ___________________________ 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 __________________________ position. - ANSWER recapitalization, minority or majority 48. ____________________________ allows a "second bite of the apple." - ANSWER recapitalization 49. For an _________________________________, the business is shut down through a simple, quick process. Makes sense if asset values _______________ the ability of the business to produce income required to support an investment. - ANSWER orderly liquidation, exceed 50. An intergenerational transfer can be the path of least resistance, but not always a path to __________________________. - ANSWER growth or success 51. Managers are not always good _______________________________. - ANSWER entrepreneurs 52. Taxable gain on ESOP shares ________________________________. - ANSWER may be deferred 53. Shares of an ESOP are purchased with _________________ dollars. - ANSWER pre-tax 54. An ESOP requires securities registration _____________________. - ANSWER exemption 55. A sale to ______________________ provides a higher price (highest of the options). - ANSWER a third party 56. A sale to ______________________ provides more cash up front. - ANSWER a third party 57. A sale to ______________________ is usually a long process (9-12 months). - ANSWER a third party 58. A sale to ______________________ is the highest cost option (highest benefit). - ANSWER a third party 59. A sale to ______________________ can be very complex with approximately 1,000 professional hours. - ANSWER a third party 60. A _______________________ is expensive relative to benefit - ANSWER recapitalization 61. In a _____________________, there is no money for goodwill. - ANSWER orderly liquidation 62. In a __________________________ there are uncertain proceeds, no guarantee. - ANSWER orderly liquidation 63. _____% of small businesses are family controlled. - ANSWER 90 64. There are essentially _______________ options for selling a small business. - ANSWER seven 65. Buy-sell are usually _______________ and _______________________. - ANSWER poorly written, underfunded 66. Buy-sell agreement should show how much _______________ an owner has for selling and for any ______________ events. - ANSWER leverage, trigger 67. Buy-sell agreements typically have a ________________ sales price. - ANSWER lower 68. Buy-sell agreements may ______________________ your options. - ANSWER limit 69. Sale to employees using an ESOP is underutilized because owners are not ________________________________. - ANSWER educated about the option 70. Sale to employees is _____________________ using an ESOP because owners are not educated about the option. - ANSWER underutilized 71. An ESOP is generally suited for a ______________________ exit. - ANSWER gradual 72. ________________________________ 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. - ANSWER sale to a third party 73. ______% of business owners have no transition team. - ANSWER 78 74. ______% of business owners have no written transition plan. - ANSWER 83 75. Half of business owners need the company to remain profitable, yet ______% have not done strategic review or a value growth project. - ANSWER 86