Business valuation divorce valuation family court valuation intellectual property valuation tax valuation stamp duty valuation buy valuation sell valuation quick valuation certified valuation expert report share valugal business valuation litigation valuation capitalisation rate. Fee multiple valuation multiple buy business sell businessObjectives (Premises) of Value:
The objective of current business valuation approaches and methods is to assess a business value to either a ‘Market Value’ or a ‘Fair Market Value’ standard or a ‘Value to the Owner’ (Investment Value) objective for a business or share of a business.
Fair Market Value is defined as the highest price available in an open and unrestricted market between informed, prudent parties acting at arm's length and under no compulsion to act, expressed in terms of money or money's worth.
Fair Market Value is assessed by reference to a likely sale transaction but does not reflect the strategic benefits or gains from synergies that might be inherent in an acquisition by any one specific party.
The Fair Market Value usually used is the ‘Trade Value’, i.e. the value to an informed buyer of the Fixed Tangible Operating Assets (the business’s tangible production assets) and the Goodwill of the business.
The Fair Market Equity Value is the net sellers’ value remaining after receipt of The Fair Market Value of the business from an informed buyer after all other business assets and liabilities have been settled as at the valuation date.
The Value to the Owner Objective - In Family Law matters, particularly in the valuation of minority shareholdings, in situations where it is known that the business is to be retained, applying hypothetical ‘market value’ approaches and methods to value such minority shareholdings may not be appropriate and the Courts in a number of such matters have favoured a Value to the Owner (VTO) or Investment Value Objective.
The Value to the Owner of a share of such a business is the net present value or the capitalized value of any expected business operating cash flows (and other valuable considerations where identifiable) to the share owner resulting from his / her ongoing ownership. In the Canadian legal system, this is called ‘The Investment Value’.
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