In making a divorce valuation, it is generally not appropriate to apply a discount for the loss of a key person if there will be no change in management and no key people will be leaving the company. The divorce value is generally measured in the hands of the current owner for purposes of valuing the business to the marital community. If both spouses will be leaving the business, a discount for the loss of a key person may be appropriate. The valuation analyst should ensure that if there is the loss of a key person, or significant change in management, that an appropriate discount is applied.
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