Page 30 - Bankruptcy and Reorganization Services

Chapter 7

The Levels of Value Framework, Premiums, and Discounts

Levels of Value Framework

Valuation adjustments for discounts and premiums must be considered in the context of ownership con-
trol and marketability of the ownership interests. Ownership characteristics and the value they reflect are
often illustrated using a "levels of value" chart.

The five levels of value that are typically encountered in a business valuation engagement are

1. synergistic (strategic) value,

2. value of control shares,

3. publicly traded equivalent value,

4. value of restricted stock of public company, and

5. value of nonmarketable minority shares.

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