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By Charles Laverty, Jr., ASA, CBA, CFFA

When considering your business valuation and business risks in the hopes of selling that business, there are many factors to consider. One important factor to understand is the application of valuation discounts. The valuation of a controlling interest versus a minority interest within a privately held business can have different values, depending on the circumstance.  Due to the inherent differences between controlling and minority interests, the value of a minority interest is not equal to its pro rata portion of the whole.  This is a direct result of the application of minority interest and lack of marketability discounts.

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