NAV’s team is well-versed in preferred stock valuations. We have worked closely with multi-generational family businesses, PE funds, VC funds, and their trusted advisors in the initial and continuing valuation requirements for these assignments.

Our professionals leverage our business valuation and preferred stock expertise. Both are necessary for these assignments. 

Step 1: Business Enterprise Valuation of all Capital Classes

We perform the business enterprise valuation to value all capital classes and the business overall. Since the partnership structure focuses on a preferred equity class (generally owned by the senior owners or family members), we analyze the preferred equity and its intricacies regarding priority returns, liquidation preferences, and cash flow preferences.)

Step 2: Preferred Stock Valuation Sets Preferred Yield Rate

NAV’s team deploys our experience valuing credit and preferred equity since the process for valuing each exhibits core common fundamentals. The steps are as follows:

• A preliminary analysis of issuer characteristics and payment risks is known as capacity analysis.
  

• Credit/benchmark analysis of guideline public company issuers.
  

• Another step is to consider the subject company’s ability and intent to pay any preferred stock liquidation value.

• Financial modeling of projected dividends, notably any cumulative preferred or non-cumulative preferred dividends
  

• Study of any other preferred stock features embedded in the agreement
  

• Benchmark the comparable guideline company preferred stock yields to help select the preferred rate for the subject company's freeze partnership structure.
  

Step 3: Perform Efficient Preferred Stock Valuation Updates

We scale with clients to provide cost-effective updates when performing the annual preferred stock valuations for preferred rate compliance, a process leveraging our existing reports, market data, and familiarity with the subject company.

How We Are Transparent

Our efficient and periodic updates at reduced fees both help substantiate a current analysis and save client money in the process.

Please get in touch with us for more information and client references.