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Mercer’s Musings #4: Factors to Consider in Valuing Partial Ownership Interests

Chris Mercer

Provisions in the organizational and governance documents that affect the rights, restrictions, marketability and liquidity of the subject interest. Defined expiration or termination dates contained in the governing documents, or other external factors, that may precipitate a foreseeable liquidation or sale of the underlying entity.

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Fair Market Value and the Nonexistent Marketability Discount for Controlling Interests

Chris Mercer

The hypothetical parties have agreed to and signed the documentation customarily needed for a transaction prior to or on the valuation date. These above elements are important implications of the definitions of fair market value which are overlooked or misunderstood by some business appraisers, attorneys and judges.