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Which Valuation Figure is Most Important?

The answer to this question depends chiefly upon the purpose for the valuation engagement. If

you are negotiating the sale/purchase of a business via an asset sale, then it is the asset value

which is most relevant. If you are filing an estate/gift tax return, it is the equity value which is

most important. When evaluating middle-market companies for M&A purposes, both equity and

enterprise value will be useful. If your business is rapidly deteriorating and you are

contemplating a reorganization, then liquidation value may be of most relevance.

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