Preferred equity valuation is often influenced by the market-based yield for comparable publicly traded securities. Since the yields of publicly traded equity securities typically correlate with corporate bond yields, the prevailing interest rate environment may have valuation implications on the fair market value of preferred equity interests.
In the preparation of Internal Revenue Service Form 706 (estate tax return), professional and collegiate stadium seat licenses, commonly known as private seat licenses, for certain season tickets often are overlooked. Many estate professionals mistakenly consider them to be of deficient value; however, active public markets exist for the same or similar licenses, and seat licenses can be transferred with the blessing of the respective team. Thus, the seat license should be considered when preparing an estate tax return.
Convertible bonds may provide unique benefits within the private company capital structure. Estimating the fair market value of a convertible bond, therefore, requires a number of unique steps to account for the convertible bond conversion premium.
Editor for this issue: Timothy J. Meinhart
Editor for this issue: Charles Wilhoite and Scott Miller
Editor for this issue: Robert F. Reilly, CPA
Editor for this issue: Weston C. Kirk
Editor for this issue: Samuel S. Nicholls
Editors for This Issue: Connor J. Thurman and John C. Ramirez