Business Valuation: Risks and Rewards
One important element is present in all valuation engagements: the valuator must consider the risks associated with the subject entity, division, subsidiary, or affiliate. Modern valuation theory accepts that high risks to investors require a larger discount or capitalization rate than when the rewards of ownership are more certain.
Business Valuation: The Market Approach
In many countries, mainly in the English tradition, including Australia, Britain, Canada, Ghana, Hong Kong, India, Malaysia, Singapore, South Africa, South Korea, Taiwan, and the United States, a great deal of corporate financing is arranged through stock exchanges. In addition, some of those nations have developed transparent markets for many types of assets (art, equipment, real estate, etc.) as well as commodities and other securities.
