Valuation Ideas

I. DEFINITIONS OF VALUE

IDEAS

FAIR MARKET VALUE-Think of this as the value of the business as it is currently positioned, with earnings and cash flows reflective of historical performance and reasonable prospects for the future.

INVESTMENT VALUE-This reflects the value that a prospective acquirer might attach to an enterprise, which encompasses synergies that the acquirer believes exist between its current business and the target. These synergies are reflected in a acquisition premium that may be paid in excess of the value of the enterprise as is is currently positioned. In addition to these two key defintions of value, other circumstances may call for deviations of additions values such as: next page

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