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State four circumstances in which the shares of an unquoted company might need to be valued

State four circumstances in which the shares of an unquoted company might need to be valued

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Four circumstances in which the shares of an unquoted company might need to be valued are :

  1. The company is being acquired by another company, and the acquiring company wishes to know the fair value to pay for the shares of the unquoted company
  2. The company wishes to acquire a target company by issuing its stock, and both parties wish to determine the fair value of the unquoted company's shares so that an appropriate swap ratio can be agreed upon
  3. The company is going public, and a fair value needs to be determined so that the IPO issue price can be determined
  4. The company creates a pool of stock options for employees. If the company wishes to give the employees a liquidity facility by buyback, the shares would need to be valued.
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