Methodology for deriving the fair value of operating company
Journal Title: VUZF - Year 2018, Vol 1, Issue 2
Abstract
Fair value is defined as a sale price agreed to by a willing buyer and seller, assuming both parties enter the transaction freely. Many investments have a fair value determined by a market where the security is traded. The most reliable way to determine an investment’s fair value is to list the security on an exchange. If XYZ stock trades on an exchange, market makers provide a bid and ask price for XYZ stock. It might be difficult to determine a fair value for an asset if there is not an active market for trading the asset. This is often an issue when analysts perform a company valuation which is the subject of this work.
Authors and Affiliations
Severin Vartigov
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