Month: January 2014

The Income Approach to Determining Business Value

The Income Approach to Determining Business Value

The income approach is often the primary approach used for valuation and is used in the valuation of most operating companies. The income approach discounts the expected future cash flows (returns on investment) to present value using an appropriate rate of return for the investment. Future cash flows are typically based on the net after-tax cash flows expected …

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Capital Gains

The Treatment of the Trapped in Capital Gains in the Valuation of Holding Companies

The issue of how to treat the trapped in capital gains most often shows up when applying the Adjusted Net Asset Approach to valuing a holding company. The Adjusted Net Asset Value Approach is typically used when valuing a real estate or investment holding company. This approach results in the book value of the assets …

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