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Valuing Noncontrolling Interests When a Buy-Sell Agreement Exists
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Larry J. Kasper
Published/Copyright:
January 28, 2009
When a buy-sell agreement exits, current valuation approaches based upon the "typical buyer" concept do not address the specific triggering events in the agreement. Until now, no approach has been put forth that addresses valuations based upon the triggering events, which produce different values to different interests. The proposed conditional probability approach provides a totally transparent, objective fair market valuation of a specific noncontrolling interest when 1) triggering events do not occur, 2) a triggering event fails to provide a formula, or 3) the agreement fails to fully specify what the parties intend by fair market value.
Keywords: buy-sell; probability; triggering event; minority; noncontrolling; expected value; valuation; disability; retirement
Published Online: 2009-1-28
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Keywords for this article
buy-sell;
probability;
triggering event;
minority;
noncontrolling;
expected value;
valuation;
disability;
retirement
Articles in the same Issue
- Article
- Valuing Noncontrolling Interests When a Buy-Sell Agreement Exists
- The Valuation of Toll Roads and the Implication for Future Solvency with Special Reference to the Transurban Group
- Life and Death of Businesses: A Review of Research on Firm Mortality
- Forecasting the Periodic Net Discount Rate with Genetic Programming
- The Use of Earnings Capitalization in the Valuation of Growing Firms
- Qualitative Judgments and Consistency in Business Valuation
- The Private Equity Myth
