Market Value

The world of market value describes the value of a business interest in the marketplace. By seeking a market value for one's business, an owner is motivated to find the open market value, probably envisioning a transfer. Rather than Internal Revenue Service (IRS) regulations, court precedents, or insurance company rules, financial intermediaries govern the market value. As with most private business valuation, market value requires a point‐in‐time expression of value. This chapter describes the process of determining the market value for one's business. The chapter also explains the various levels of private ownership that correspond to the market value world. These ownership levels apply to most value worlds, except for fair market value, which employs a separate “Levels of Value” framework.