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Value to Owner

Definition - What does Value to Owner mean?

Value to owner is the value of a specific item to a particular investor based on an individual investor’s requirements and expectations. Valuations performed in pursuance of the value to owner objective take into account benefits that arise from the ownership, which motivate retention thereof for an indefinite period.

Divestopedia explains Value to Owner

The purpose of business valuation in family law is to ascertain the value to the owner when an interest is held in the family firm; there may not be a ready market for such shares, making valuation of these shares difficult. Using the future maintainable earnings method, the present value of income streams may be calculated. However, this does not represent the price. These shares cannot be deemed valueless because they are unrealizable because there are other benefits which accrue through their ownership, such as the right to receive dividends. Therefore, the present commercial value of shares in a proprietary firm does not reflect their value to those who own them. These shares are valued on the basis of their worth to the shareholder. If a party is likely to retain his or her shares, the value to the owner is determined on the basis that a benefit is derived over and above the eventual sale price. There is a gestation of value to the owner borne out of the minority shareholder’s issues.

An object of wealth may confer different advantages to different owners. The value of a specific property to a specific group is differentiated as its real value rather than its market price. Asset valuation and financial capacity are segregated and an appropriate calculation method is employed to determine the value to the owner.

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