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Stake Sale Valuations
Stake sale valuation, also known as equity stake valuation, is the process of determining the fair market value of a portion of ownership in a company that is being sold to another party. This type of valuation is critical when a company or an individual decides to sell a share of their equity to raise capital, forge strategic partnerships, or comply with regulatory requirements.
Key methods for stake sale valuations include:
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Discounted Cash Flow (DCF): Projects future cash flows and discounts them to their
present value.
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Comparable Company Analysis: Benchmarks against similar companies in the industry.
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Precedent Transactions: Analyzes valuation metrics of similar historical transactions.
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Net Asset Valuation: Calculates based on the company's net assets.
Key Considerations
01
When valuation is required
At the time of fund raise, internal decision making, etc.
02
Who can perform the valuation
Merchant Banker or Registered Valuer or any other professional
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