BV Specialists

JANUARY 3, 2022

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.

Appraisal 52

Appraisal Liquidation Value Net Present Value Intangible Assets 52

Chris Mercer

JULY 15, 2022

Business appraisers routinely use the discounted cash flow model to value entire businesses. The value of all remaining cash flows after the finite forecast period is captured in the terminal value, which is, effectively, a capitalization of earnings or cash flows at the end of the forecast period.

Discounted Cash Flow 52

Discounted Cash Flow Terminal Value Dividends Appraisal 52

Chris Mercer

FEBRUARY 23, 2024

In Mercer’s Musings #2, we discussed the old and cold data on restricted stock transactions that have been misused by appraisers for decades. This conclusion applies to all appraisals, including those prepared for the Internal Revenue Service. In other words, value is a function of expected cash flow, growth, and risk.

Marketability 52

Marketability Terminal Value Dividends Discounted Cash Flow 52

Chris Mercer

NOVEMBER 15, 2022

I have heard many appraisers suggest that one should not normalize owner compensation when valuing minority interests “because the minority shareholder cannot change compensation.” Otherwise, the appraiser is not valuing the appropriate asset. The present value based on these assumptions is $11.65

Business Valuation 52

Business Valuation Normalized Earnings EBITDA Terminal Value 52

Chris Mercer

MARCH 7, 2024

” And the answer holds regardless of any certifications appraisers might hold. Procedural Guidelines (PG) are designed to provide more detailed guidance for consideration by business appraisers than found in the base standards themselves. The value of the underlying enterprise or asset, if applicable.

Dividends 52

Dividends Appraisal Terminal Value Business Valuation 52

Chris Mercer

MARCH 29, 2024

Whether there was a formal appraisal or not at the pre-IPO transaction date, there was an implied marketable minority/financial control (base) value for that entity at that date. per share value was likely unobserved unless the transaction was based on an appraisal. based on the marketable minority value of $18 million.

Marketability 52

Marketability Appraisal Business Valuation Dividends 52

Chris Mercer

MARCH 8, 2023

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.

Fair Market Value 52

Fair Market Value Marketability Appraisal Business Valuation 52