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Simply put, the expectation of dividends or distributions from investments in partial ownership interests is important to investors, whether hypothetical in the context of fairmarketvalue determinations, or real investors who put real money at risk. Paragraph 8 above, with its sub-paragraphs a.
with Section 409A) require companies to establish the FairMarketValue (FMV) of their common stock through a formal valuation process. [6] 23] Equidam uses country-specific risk-free rates (10-year government bonds) and marketriskpremiums (sourced from Damodaran). [23]
11] The pricing often references the last primary round’s valuation or a formal 409A valuation, but negotiation considering company performance and market conditions is common. [11] Discount Rates / RiskPremiums: The discount rate used in DCF analysis (often the WACC) incorporates elements sensitive to market conditions. [21]
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