How do you determine the stock value in a buy/sell agreement?
If a buy/sell agreement states when a partner retires, he/she is to sell remaining stock to the remaining partner... but the retiree doesn’t offer to sell until 5 years later, should the stock be valued at its value at the time of retirement?
Although stock value can be determined by many factors, one of the easiest ways to determine stock value is to take the total sales number plus the accumulated assets of the business over a twelve-month period and multiply that by 1.5 to get a value for your business. High growth businesses can have a larger multiplier. This number will give you what your business would be worth if you would put your business up for sale. Then you take the total number and divide that by the number by the number of shares that you have per stock.