Page 423 - FM Integrated WorkBook STUDENT 2018-19

Business valuations and market efficiency

Practical considerations in the

valuation of shares and businesses

 marketability and liquidity of shares (unquoted company shares often worth
lower than similar quoted ones as they cannot be easily sold)

 available information (information may be less readily available for unlisted
companies)

 equilibrium prices (share prices in reality can be more volatile than expected
from the market efficiency theory. Prices that are not in equilibrium should be
treated with caution)

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