Table 32 Reasonable Rate of Return Calculation of Excess Earnings
Table 33 Valuation of Intangible Assets
The resulting fair market value of the intangible assets of the subject Company on a control, As if freely traded basis is $3,100,000.
Fair Market Value of the Operating Company Using Excess Earnings
The implementation of the excess earnings method is, in and of itself, a hybrid of various methods, which supports the tenuousness of the results, as many
ASSET DESCRIPTION
FMV
%
LEVERAGE
BORROWING
CAPACITY
COST OF
CAPITAL
INTEREST
Cash
1,403,000
$
100%
1,403,000
$
7.5%
105,225
$ Accounts Receivable
80%
712,800
$
9%
64,152
$ Inventories
50%
26,825
$
9%
2,414
$ Property Plant & Equipment
60%
814,950
$
9%
73,346
$ Land
60%
‐
$
9%
‐
$ Other Fixed Assets
60%
15,000
$
9%
1,350
$ Total
2,972,575
$
246,487
$ Tax Effect
60%
After‐tax cost of Capital Equity Capital
758,325
$
19.06%
144,537
$ Total Capital
3,730,900
$
292,429
$
Share with your friends: |
