What factors do you consider when deciding to invest in a business?
Transferability -Transferability denotes the right to sell an asset in a market within areasonable time frame at relatively low transaction cost, along with minimal effect on its value. Transferability is limited by ownership agreement, lack of disclosure, and the time and cost torectify it.
Liquidity - Liquidity relates to how quickly and certainly a security ownership interest can be converted into cash at the owner’s discretion. Investors value liquidity and will pay a premium for liquidity, or demand a discount for the lack of liquidity
Weighted Average Cost of Capital -Weighted average cost of capital is a calculation of a firm’scost of capital in which each category of capital is proportionately weighted.. All sources of capital, including common stock, preferred stock, bonds, debentures, notes, and any other long term obligations are included in this calculation. Simply put, determining the capital structure of the proposed target subject company can provide a true measure of return on invested capital for our investors.