Naomi owns closely held stock and is considering selling a few shares. What makes this a difficult transaction?

Question

Quizplus · Accepted Answer

Selling closely held stock is difficult because the lack of an organized market makes valuation hard to determine. As with real estate, there are many factors to consider in valuing closely held stock. Consider the following: nature of the business and history of the enterprise, outlook for the economy and for the specific industry in which the company operates, book value of stock, earning capacity of the company, and the company's dividend paying capacity.

Naomi Owns Closely Held Stock and Is Considering Selling a Few