Why Do Closely Held Firms Need to Have an Outside

question 12

Essay

Why do closely held firms need to have an outside appraiser to determine their value? What are the reasons for valuation?

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Definitions:

Cash Dividend

A cash payment of earnings made by a company to its stockholders.

Equity Securities

Financial instruments representing ownership interest in a company, such as stocks.

Available-for-Sale Debt Securities

Financial assets acquired primarily for selling in the short term but may be held for a longer period, reported at fair market value on balance sheets.

Premiums

Additional amounts paid over the normal cost or face value, often relating to insurance costs or bond prices.