1090
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Can public stocks be used to value private firms?
July / August 2008
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 1090
Abstract: Public and private businesses often differ significantly in terms of access to capital, product breadth and market reach. Still, many valuation professionals, along with the IRS and some courts, believe that the guideline public company method can work — under the right circumstances. But it takes an experienced valuator to know when and how to apply this method. This article explains the benefits and pitfalls of using the method and how to determine when it’s appropriate. (Updated 7/31/12)
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What’s “fair” in shareholder disputes?
November / December 2010
Newsletter: Viewpoint on Value
Price: $225.00, Subscriber Price: $157.50
Word count: 1090
Abstract: The term “fair value” has many meanings. In this article, the focus is on its meaning in the context of a shareholder dispute. The article discusses how fair value is defined in this context in terms of appraisal rights statutes and the Model Business Corporation Act (MBCA), promulgated by the American Bar Association. It goes on to explain how valuators estimate fair value and address valuation subtleties that arise in shareholder disputes. A brief sidebar notes the helpfulness of sound buy-sell agreements in reducing shareholder conflicts.
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Court ruling: Accounting for embedded taxes
July / August 2009
Newsletter: Advocate's Edge / Litigation Support
Price: $225.00, Subscriber Price: $157.50
Word count: 1090
Abstract: A hotly disputed business valuation issue recently was addressed in a seven-years-plus divorce case, one of first impression in New York. The appellate level court considered the extent to which the value of a holding company owned by the husband should be reduced to reflect the federal and state taxes embedded in the securities owned by the company due to unrealized appreciation. The case involved choosing between an “historical tax rate” approach to valuation vs. one in which an actual sale of the company’s assets is assumed to occur on the valuation date. A sidebar addresses the argument of the husband’s expert that the company’s value should be reduced by the nontax costs of liquidation.