How will the IRS value your business - today and after your death?
Article Abstract:
Entrepreneurs must be aware of the procedures the Internal Revenue Service (IRS) uses in valuing businesses and prepare for the process ahead of time. The IRS guidelines, which are contained in Revenue Ruling 59-60, include nature and history of the business being valued, economic outlook of the industry, net value of business or stockholder's equity, debt-to-equity ratio, stock price, and presence of goodwill. Discounts, which can also be used to decrease value, can be applied to businesses due to reasons of illiquidity, absence of current yields, existence of higher risks, and the absence of the business owner.
Publication Name: The Business Owner
Subject: Business, general
ISSN: 0190-4914
Year: 1998
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Eight ways to value your business
Article Abstract:
Business owners can employ the different valuation methods in order to ascertain average and final weighted values. Valuation methods are necessary in purchasing or selling businesses, estate planning, buy-sell agreements, stock transfers, stock options, and for settling ownership disputes. Methods include the reported net book value from the difference of assets and liabilities, liquidation value from the payment of all liabilities and sale of assets, and dividend value from the payment of a percentage of its net income.
Publication Name: The Business Owner
Subject: Business, general
ISSN: 0190-4914
Year: 1998
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How to use dividend-paying capacity to value a business
Article Abstract:
The dividend-paying method of valuation can be employed in assessing the value of a business by computing the capacity to pay dividends to stockholders if a owner chose to do so. This approach can also quantify a higher valuation compared to other methods. The two main procedures in the dividend-paying valuation approach are the determination of dividend capacity and consequent application of dividend yield.
Publication Name: The Business Owner
Subject: Business, general
ISSN: 0190-4914
Year: 1993
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