In this paper a potential buyer (valuation subject) is interested in purchasing a company (valuation object). Thereby, he strives for maximum income and acts in a real imperfect market. In order to sustain his economic interest, he must conduct a business valuation. To help him determine what maximum price he may afford to pay without the transaction proving disadvantageous, we implement an investment theory-based method. The purpose of our paper is to show how formulas derived from the state marginal price model are used to fulfil the described valuation task under realistic imperfect market conditions. As a main conclusion, the correct business value can usually not be calculated using the partial-analytic future earnings method.
JEL Codes: D46, G31 and G34
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