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The Employee Stock Ownership Plan

Author

Listed:
  • Angela Eliza Micu

    (Dunarea de Jos University of Galati, Romania)

  • Adrian Micu

    (Dunarea de Jos University of Galati, Romania)

Abstract

The market approach values a corporation by reference to market-derived pricing multiples extracted from actual sales of comparative companies or securities. The most common market approach business/stock valuation methods are (1) the guideline merged and acquired company method and (2) the guideline publicity traded company method. All business/stock valuations are based on hypothetical sales transactions. In the market approach, there is a hypothetical sale of the corporate stock. The fact the company does not actually sell its stock does not invalidate the use of the market approach. Likewise, the fact that the company does not actually sell its assets does not invalidate the use of the asset-based approach. In a hypothetical sale of the corporate asset, a hypothetical BIG tax liability would be paid.

Suggested Citation

  • Angela Eliza Micu & Adrian Micu, 2005. "The Employee Stock Ownership Plan," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 81-84, JUNE.
    • Handle: RePEc:ddj:fseeai:y:2005:i:1:p:81-84
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