An important issue that must be considered when valuing a business is whether a controlling ownership interest or a minority interest is being valued.

Question

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Whether a controlling ownership interest or a minority interest is being valued can significantly impact the value of the business. A controlling interest typically comes with greater decision-making power and therefore may be valued at a higher amount than a minority interest. Additionally, discounts may be applied to the valuation of a minority interest due to lack of control and marketability.

An Important Issue That Must Be Considered When Valuing a Business