Cost of Equity The cost of equity is the rate of return an investor expects to receive as compensation for the risk associated with owning the stock or shares of a company. In comparison with the cost of debt, in which interest payments and repayment of principal are defined in a contract, the cost of […]
Copyright is a legal term that refers to the exclusive right that an individual or corporation has over original works of authorship. This means that they can take legal action against someone who uses the copyrighted asset for commercial purposes. Types of Copyrights Among the most common copyrights, such as music, paintings, and books, but artistic […]
After Michael Jackson’s death in 2009, his likeness and image were under trial to determine their value and the tax impact it would have on Jackson’s heirs. After years of trial disputes, the judge decided that the IRS valuation was heavily overpriced due to misappreciations, and instead sided closer to the estate’s expert valuation at […]
When performing a business valuation, several discounts should be considered that may need to be applied to a business’ value. Below, we will explain what a discount for lack of control means, as well as when an investor, appraiser, or other users of valuation information should be aware of it. DLOC Valuation The DLOC is a discount […]
A business fair market value (FMV), or market value, is commonly used in business valuations and is defined by several public institutions or valuation associations as: “the price that would be negotiated in an open and unrestricted market between a knowledgeable, willing but not anxious buyer and a knowledgeable, willing but not anxious seller acting at arm’s length.” If […]
Are you a business owner who’s preparing your business for sale? If so, then you’ll most likely need to prove to the buyer that the selling price is fair. Justifying to a potential buyer why the sale price is what it is can help your credibility and ensure a faster sale. If you’re interested in […]
The term “discount for lack of marketability” is often referred to, but it isn’t always fully understood. Markets in which public and private equity stakes (i.e., companies) can be negotiated are not exactly the same; the trading conditions are substantially different, especially in terms of marketability (liquidity). This can and often does have a significant impact on […]