Remove Fair Market Value Remove Risk Premium Remove Terminal Value
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Mercer’s Musings #4: Factors to Consider in Valuing Partial Ownership Interests

Chris Mercer

Simply put, the expectation of dividends or distributions from investments in partial ownership interests is important to investors, whether hypothetical in the context of fair market value determinations, or real investors who put real money at risk. Paragraph 8 above, with its sub-paragraphs a.

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Startup Valuation: The Ultimate Guide

Equidam

with Section 409A) require companies to establish the Fair Market Value (FMV) of their common stock through a formal valuation process. [6] 23] Equidam uses country-specific risk-free rates (10-year government bonds) and market risk premiums (sourced from Damodaran). [23]

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Startup Valuation: The Ultimate Guide for Founders

Equidam

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 / Risk Premiums: The discount rate used in DCF analysis (often the WACC) incorporates elements sensitive to market conditions. [21]