CEPA - EXIT OPTIONS ANALYSIS COMPREHENSIVE EXAM REVIEW
NOTES WITH CORRECT ANSWERS CHECKED FOR ACCURACY,
DETAILED EXPLANATIONS FOR EVERY TOPIC, AND
ORGANIZED REVISION MATERIAL FOR BETTER
UNDERSTANDING
Based on the 2013 EPI State of Owner Readiness Survey, how many business owners were not familiar wi
th all their transition options? - CORRECT ANSWER -Nearly 2/3rds
What is a pro for an intergenerational transfer? -FCORRECT ANSWER -
a) Business legacy preservation b) Planned c) Lower cost
Which of the following is not an inside exit option? - CORRECT ANSWER -Recapitalization
WhatFare the two general categories for private ownership exit options? - CORRECT ANSWER -
Inside and Outside
. A business owner you are advising on exit optionsFdoes not have a family member or children to transfer
the business to. She would like the exit option thatFwill get her the highest price for the business, more c
ash up front, and will allow her to walk away faster. What option do you recommend? -
CORRECT ANSWER -Third Party Sale
Inside Sale options - CORRECT ANSWER -
i. Intergenerational transfer ii. Management buyout iii. Sale to existing partners iv. Sale to employees (ESO
P)
Outside Sale options - CORRECT ANSWER -
i. Sale to third party ii. Recapitalization iii. IPO iv. Orderly liquidation
When asked, "what best describes how you are planningFto transition?" Owner plans for transition, based
on 2013 SOOR: - CORRECT ANSWER -
i. 35.6% indicated they would transition via an internal exit option ii. 31.4% indicated they would transitio
n via an external option iii. 30.9% indicated they were not sure iv. 2% of the sample answered "other
Intergenerational transfer - CORRECT ANSWER -
. Transfer of business stock to direct heirs, usually children. 50% of business owners want to exercise this
, option - in reality, only about 30% actually do
NOTES WITH CORRECT ANSWERS CHECKED FOR ACCURACY,
DETAILED EXPLANATIONS FOR EVERY TOPIC, AND
ORGANIZED REVISION MATERIAL FOR BETTER
UNDERSTANDING
Based on the 2013 EPI State of Owner Readiness Survey, how many business owners were not familiar wi
th all their transition options? - CORRECT ANSWER -Nearly 2/3rds
What is a pro for an intergenerational transfer? -FCORRECT ANSWER -
a) Business legacy preservation b) Planned c) Lower cost
Which of the following is not an inside exit option? - CORRECT ANSWER -Recapitalization
WhatFare the two general categories for private ownership exit options? - CORRECT ANSWER -
Inside and Outside
. A business owner you are advising on exit optionsFdoes not have a family member or children to transfer
the business to. She would like the exit option thatFwill get her the highest price for the business, more c
ash up front, and will allow her to walk away faster. What option do you recommend? -
CORRECT ANSWER -Third Party Sale
Inside Sale options - CORRECT ANSWER -
i. Intergenerational transfer ii. Management buyout iii. Sale to existing partners iv. Sale to employees (ESO
P)
Outside Sale options - CORRECT ANSWER -
i. Sale to third party ii. Recapitalization iii. IPO iv. Orderly liquidation
When asked, "what best describes how you are planningFto transition?" Owner plans for transition, based
on 2013 SOOR: - CORRECT ANSWER -
i. 35.6% indicated they would transition via an internal exit option ii. 31.4% indicated they would transitio
n via an external option iii. 30.9% indicated they were not sure iv. 2% of the sample answered "other
Intergenerational transfer - CORRECT ANSWER -
. Transfer of business stock to direct heirs, usually children. 50% of business owners want to exercise this
, option - in reality, only about 30% actually do
