CEPA (CERTIFIED EXIT PLANNING ADVISOR)
EXAM PREP VERSION 2 2026/2027 WITH
ACTUAL CORRECT QUESTIONS AND
VERIFIED DETAILED ANSWERS
|CURRENTLY TESTING QUESTIONS AND
SOLUTIONS|ALREADY GRADED A+|NEWEST
|JUST RELEASED!!|GUARANTEED PASS
A family enterprise can best be described as a _____.
System
What are examples of assets a family enterprise may own outside of their operating business?
Real estate
Heirlooms
Deferred assets
In a typical leveraged ESOP formation, who would a bank directly loan money to?
Company
What are success factors for an ESOP candidate?
Unused debt capacity
Capable management
Well-established company with predictable cash flows
What is considered for valuation in an ESOP transaction?
Fair market value
Enterprise value
Lack of marketability discount
1|Page
,Besides providing liquidity for the owner, what is another reason an ESOP may be a viable exit
option?
Capital formation
Employee productivity and retention
Known Buyer - controls timing and communication
What is the standard transition time for implementing an ESOP?
4 to 6 years
What would be a benefit to a business owner for implementing an ESOP?
Owner can retain operational and board control during transition
80% of all ESOPs are in companies with less than ____ employees
300
What would be considered a disadvantage of an ESOP?
ESOPs are not appropriate for a company with a weak management team
Which of the following is considered an eligible qualified replacement property (QRP)?
Convertible bonds
Which of the following is considered a non-eligible qualified replacement property (QRP)?
Municipal bonds
In an ESOP, it's common to incentivize management through "sweat equity" such as:
stock options
What is the maximum tax deferral percentage that can be achieved through an ESOP?
100%
What is the most common application of an ESOP?
2|Page
,To provide liquidity for private company owners
After the initial step of creating the ESOP trust, what is a company's next step in the formation
process?
Company borrows funds from an outside lender
Accounts, attorneys, and financial planners are all examples of advisors that should be added to
the team starting in the _______ gate of the value acceleration process.
Discover
What are potential cons of working within a team?
Slower production
More expensive
More complicated
Specialized consultants are typically considered members of an owner's:
Extended team
What are core elements of a team that makes it effective?
Commitment
Trust
Rhythm
What is the common goal of the team, no matter who is in the door first?
Getting the owner to do the Triggering Event
An owner's family is typically considered part of an owner's ______.
Core team
Insurance and tax planning specialists are examples of advisors that are typically added to the
team starting in the ____ gate of the value acceleration process.
3|Page
, Prepare
What is a potential pro of working within a team?
Mindshare
To gain the commitment of the members of your team, you need:
A clear organizing principle
Why might an advisor you encounter not want to take part in your team?
They fear losing their personal relationship to the owner
What percentage of privately held businesses that are offered for sale each year ultimately do
not sell?
80%
According to the Family Firm Institute, what percentage of family transitions survive into the
second generation?
30%
According to EPI's first national State of Owner Readiness Survey, what percentage of business
owners have done no exit planning at all?
49%
Business owners are leaving dollars on the table because they are not focusing on what?
Enterprise Value
The Advisor of the Future needs to get owners and advisors to make several paradigm shifts for
exit planning and value acceleration to work to the benefit of owners and their families. What is
the first paradigm shifts that needs to be made?
4|Page
EXAM PREP VERSION 2 2026/2027 WITH
ACTUAL CORRECT QUESTIONS AND
VERIFIED DETAILED ANSWERS
|CURRENTLY TESTING QUESTIONS AND
SOLUTIONS|ALREADY GRADED A+|NEWEST
|JUST RELEASED!!|GUARANTEED PASS
A family enterprise can best be described as a _____.
System
What are examples of assets a family enterprise may own outside of their operating business?
Real estate
Heirlooms
Deferred assets
In a typical leveraged ESOP formation, who would a bank directly loan money to?
Company
What are success factors for an ESOP candidate?
Unused debt capacity
Capable management
Well-established company with predictable cash flows
What is considered for valuation in an ESOP transaction?
Fair market value
Enterprise value
Lack of marketability discount
1|Page
,Besides providing liquidity for the owner, what is another reason an ESOP may be a viable exit
option?
Capital formation
Employee productivity and retention
Known Buyer - controls timing and communication
What is the standard transition time for implementing an ESOP?
4 to 6 years
What would be a benefit to a business owner for implementing an ESOP?
Owner can retain operational and board control during transition
80% of all ESOPs are in companies with less than ____ employees
300
What would be considered a disadvantage of an ESOP?
ESOPs are not appropriate for a company with a weak management team
Which of the following is considered an eligible qualified replacement property (QRP)?
Convertible bonds
Which of the following is considered a non-eligible qualified replacement property (QRP)?
Municipal bonds
In an ESOP, it's common to incentivize management through "sweat equity" such as:
stock options
What is the maximum tax deferral percentage that can be achieved through an ESOP?
100%
What is the most common application of an ESOP?
2|Page
,To provide liquidity for private company owners
After the initial step of creating the ESOP trust, what is a company's next step in the formation
process?
Company borrows funds from an outside lender
Accounts, attorneys, and financial planners are all examples of advisors that should be added to
the team starting in the _______ gate of the value acceleration process.
Discover
What are potential cons of working within a team?
Slower production
More expensive
More complicated
Specialized consultants are typically considered members of an owner's:
Extended team
What are core elements of a team that makes it effective?
Commitment
Trust
Rhythm
What is the common goal of the team, no matter who is in the door first?
Getting the owner to do the Triggering Event
An owner's family is typically considered part of an owner's ______.
Core team
Insurance and tax planning specialists are examples of advisors that are typically added to the
team starting in the ____ gate of the value acceleration process.
3|Page
, Prepare
What is a potential pro of working within a team?
Mindshare
To gain the commitment of the members of your team, you need:
A clear organizing principle
Why might an advisor you encounter not want to take part in your team?
They fear losing their personal relationship to the owner
What percentage of privately held businesses that are offered for sale each year ultimately do
not sell?
80%
According to the Family Firm Institute, what percentage of family transitions survive into the
second generation?
30%
According to EPI's first national State of Owner Readiness Survey, what percentage of business
owners have done no exit planning at all?
49%
Business owners are leaving dollars on the table because they are not focusing on what?
Enterprise Value
The Advisor of the Future needs to get owners and advisors to make several paradigm shifts for
exit planning and value acceleration to work to the benefit of owners and their families. What is
the first paradigm shifts that needs to be made?
4|Page
