Take us to your leader – Appraisers assess company risk with key-person discounts

Description

Abstract: The great thing about “key people” is that they’re indispensable. But that’s also the bad thing: Their company would likely start to struggle almost immediately upon their departure or sudden demise. Appraisers recognize this danger and have a detailed way of calculating its effect on business value: the key-person discount. This article explains when it’s applicable — and, on the opposite side of the coin, how certain factors can reduce or eliminate use of this discount.