Please read the article and answer about questions. Questions 1. Showing your us

Question

Please read the article and answer about questions.

Questions

1. Showing your use of the three methods of valuation, what would you conclude is the fair market value of PMC?

2. Once you have established your estimate of the fair market value, state what your opening offer for the business would be and state why you selected this opening offer.

3. state what the terms and conditins o your offer would be? (Terms & conditions would include items such as: the amound of the purchase price paid at closing and amount to be paid over time as a promissory note; how much of the purchase value would be compensated to the seller as payment for a non-competition of paying health insuance for the seller and/or his brothers for some period of time after the sale; would there be any consideration of writing into the purchase agreement a promise to keep the non-family employees on the payroll for some guaranteed length of time?)

Explanation / Answer

Market value is the price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization of a publicly-traded company, and is obtained by multiplying the number of its outstanding shares by the current share price. Market value is easiest to determine for exchange-traded instruments such as stocks and futures, since their market prices are widely disseminated and easily available, but is a little more challenging to ascertain for over-the-counter instruments like fixed income securities. However, the greatest difficulty in determining market value lies in estimating the value of illiquid assets like real estate and businesses, which may necessitate the use of real estate appraisers and business valuation experts respectively.

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