How Elements of Control Affect Value
We’ve all heard the phrase that the “whole is greater than the sum of its parts.” But you might not know that the same theory can apply in the valuation of interests in a business. Control is Valuable When a publicly traded business is acquired in the whole by an outside buyer, it is often…
Three Approaches to Valuing a Business
Most closely held business owners want to know the value of their investments, especially if they are going to sell or gift shares to family members or charities. Valuing a private business is a complex undertaking, however. The only sure way to appraise a business interest is to hire a valuation professional who understands the…
The Market Approach: A Touchstone in Valuation
The market approach, whereby appraisers use comparable “guideline companies” to help them estimate the value of a private business, has become a long-standing valuation touchstone. Two primary valuation methods are categorized under the market approach: Guideline public company method. Here, appraisers identify companies with stock (or partnership interests) that are actively traded in the public…