123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Business >> View Article

Uses Of Valuation Discounts In Business Valuation

By Author: bhumi
Total Articles: 6

There are two primary instances in which Valuation Discounts are used. These include entity or shareholder level discounts. Entity-level discounts affect the business as a whole while the shareholder level discounts affect certain ownership interest holders.

When estimating the value of an ownership interest, typically controlling ownership interests sell at a higher value than non-controlling ownership interests. There are many reasons as to why a controlling interest in a business is generally worth more on a pro-rata basis than a minority position. Generally a controlling interest can confer the rights to the following:

Elect directors
Select and/or remove management
Dictate dividend policies
Determine compensation and benefits
Acquire and sell assets
Determine corporate strategy and long-term goals
Acquire other companies or merge with other companies
Revise articles of incorporation and bylaws


Owners of closely held businesses are affected by the inability to readily convert their investment into cash. The term discount for lack of marketability is a general term referred to in Business Valuation for the impairment of value for reasons relating to liquidity. There is no quantitative formula to apply a discount for lack of Marketability to a privately held company. A valuation analyst will review several aspects of the business and organizational documents to determine if a discount for lack of marketability is appropriate.

Total Views: 44Word Count: 245See All articles From Author

Business Articles

1. Best Digital Marketing Services In Allahabad For Business Growth
Author: Hitanshu Gupta

2. Professional Locksmith Tighten Up Your Residential Security
Author: Rene Navas

3. Interesting Social Media Sites
Author: Unknown Member

4. Airport Limo & Taxi
Author: Unknown Member

5. Top Notch Asset Movers Will Offer World Class Services
Author: sandro saka

6. Designer Bathroom Furniture
Author: Unknown Member

7. Which Is Better- Lower Floor Or A Higher Floor In Apartment | 2 Bhk Flat For Sale In Bangalore
Author: Venkat

8. Car Rental Dubai
Author: Unknown Member

9. Top Kids Loft Beds With Slides
Author: Unknown Member

10. A Contest To Reveal Culture
Author: Steve Scott

11. Know These 5 Useful Tips For Finding The Best Sign Maker
Author: Jamie Austin

12. Verkaufen Sie Ihr Haus Schnell
Author: Unknown Member

13. India To Surpass China As World's Largest Energy Growth Market
Author: Kelly Sanchez

14. Claiming An Education Credit? Don’t Forget The Timing Rules
Author: Leon A. Elwell

15. Top 3 Questions To Ask While Opting Best Kids Bedroom Design!
Author: The author of this article is a passionate reader

Login To Account
Login Email:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: