Family business: Major reasons for a business valuation
Not what you're looking for?
Why value a private family business?
Identify and discuss what you believe to be the major reasons for valuation.
Purchase this Solution
Solution Summary
The 670 word solution presents 14 separate reasons that a family business might want or require a business valuation. The solution also explains the difference between an appraisal and a valuation.
Solution Preview
A true business valuation is unlike an appraisal of an asset, such as real property, or equipment. A valuation assesses the income stream that a business projects in addition to the hard assets owned by the entity. The income stream is determined by considering what an investor would pay to own that income, much as an investor might consider the return on any type of investment.
There could be several particular reasons for valuing a family business:
1. A divorce action will almost certainly guarantee some sort of valuation to accommodate the splitting of assets. Even though the business may be owned and operated by only one of a couple, the other is entitled to half of the value.
2. In a family business when children or other relatives are involved (more than the initial husband and wife), the same issue is relevant for a divorce of one of the members of the business, even if it is a minority interest.
3. For estate planning purposes, a valuation is often prepared in order to ...
Purchase this Solution
Free BrainMass Quizzes
Basic Social Media Concepts
The quiz will test your knowledge on basic social media concepts.
Writing Business Plans
This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.