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Analyzing Complex Appraisals for Business Professionals by John Lifflander, Shannon P. Pratt

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Chapter 16

The Market Approach

Market Approach Concept and Overview

The concept of the market approach in business appraisal is that valuation guidance can be found in transactions involving similar companies. It is the same technique as the more familiar appraisal of a house by analyzing sales of similar houses. However, “similar” businesses have far more differences among them than do similar houses, and the appraiser must carefully analyze the similarities and differences.

The market approach to business appraisal also has several dimensions that must be considered that are either not found at all or treated differently in the real estate appraisal comparative sales approach:

•   Valuing controlling versus minority interests

•   Valuing total ...

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