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Business owners likely have particular ideas about the value of their company and how best to calculate it, given their experience and knowledge of their financial history, and understanding of the market and industry in which they operate. Market Approach. >The Asset Approach.
Fair Market Value Defined Fair market value occurs at the intersection of hypothetical negotiations between hypothetical willing, knowledgeable and able buyers and sellers. Therefore, in every fair market value determination prepared by business appraisers, it is critical that both buyers and sellers are present for the negotiation.
The differing natures of the two groups of transactions can be seen when looking at the price/bookvalue multiples. There is no information in any restricted stock study to help business appraisers estimate the value of expected future dividends. And what about the terminalvalue that gives rise to capital appreciation?
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