Valuing Noncontrolling Interests When a Buy-Sell Agreement Exists

Kasper Larry J.
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Kasper Larry J.: Larry J. Kasper, CPA

Journal of Business Valuation and Economic Loss Analysis, 2009, vol. 4, issue 1, 55

Abstract: When a buy-sell agreement exits, current valuation approaches based upon the "typical buyer" concept do not address the specific triggering events in the agreement. Until now, no approach has been put forth that addresses valuations based upon the triggering events, which produce different values to different interests. The proposed conditional probability approach provides a totally transparent, objective fair market valuation of a specific noncontrolling interest when 1) triggering events do not occur, 2) a triggering event fails to provide a formula, or 3) the agreement fails to fully specify what the parties intend by fair market value.

Keywords: buy-sell; probability; triggering event; minority; noncontrolling; expected value; valuation; disability; retirement (search for similar items in EconPapers)
Date: 2009
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DOI: 10.2202/1932-9156.1042

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