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Business Valuation and Federal Taxes: Procedure, Law and Perspective, 2nd Edition by Shannon P. Pratt, David Laro

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Appendix A

International Glossary of Business Valuation Terms1

Adjusted book value method

A method within the asset approach whereby all assets and liabilities (including off-balance-sheet, intangible, and contingent) are adjusted to their fair market values. [Note: In Canada on a going-concern basis.]

Adjusted net asset method

See Adjusted book value method.

Appraisal

See Valuation.

Appraisal approach

See Valuation approach.

Appraisal date

See Valuation date.

Appraisal method

See Valuation method.

Appraisal procedure

See Valuation procedure.

Arbitrage pricing theory

A multivariate model for estimating the cost of equity capital, which incorporates several systematic risk factors.

Asset (asset-based) approach

A general way of determining a value indication of a business, business ownership interest, or security using one or more methods based on the value of the assets net of liabilities.

Beta

A measure of systematic risk of a stock; the tendency of a stock's price to correlate with changes in a specific index.

Blockage discount

An amount or percentage deducted from the current market price of a publicly traded stock to reflect the decrease in the per-share value of a block of stock that is of a size that could not be sold in a reasonable period of time given normal trading volume.

Book value

See Net book value.

Business

See Business enterprise.

Business enterprise

A commercial, industrial, service, or investment entity (or a combination thereof) pursuing an economic activity. ...

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