Fair Market Valuation Form - eVANTAGE - Equity Trust Company 2025

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More specific to our focus, the fair market value of a private companys stock is how much one share of that stock would be worth on the open market. A private companys stock is by definition not traded on the public markets, so the price discovery mechanism of said markets can be inaccurate.
Fair market value (FMV) is the price at which property would change hands between a willing buyer and a willing seller (who are independent, nonfamily members), where both parties have reasonable knowledge of the relevant facts, and neither party is under any compulsion to buy or sell.
Company valuation = Debt + Equity Cash Since the enterprise value method considers every source of capital, investors can rely on this valuation to neutralise market risks. However, using the enterprise value method to determine the company worth for high-debt industries can lead to incorrect conclusions.
The total fair market value of a business is often called the companys Enterprise Value, or the sum of its market value inclusive of debts, minus its cash and cash equivalents.
To determine the FMV of most public company stock, you can go online and quickly see the price of shares. This value is influenced by financial and economic factors such as the companys earnings, comparative market analysis, and other market conditions.

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It is assumed that marketing price data often contains errors. Thus, to assess the normal share price, you need to consider the average trading price of a particular day. Thus, the Fair Market Value of a share is determined by the latest trading price of a publicly-traded company.