
The genesis of what we now call the Integrated Theory of Business Valuation was my 1997 book, Quantifying Marketability Discounts. That book introduced the Quantitative Marketability Discount Model (QMDM) to the business appraisal profession and focused on shareholder level cash flows. The QMDM was, and is, a shareholder-level discounted cash flow model. In my 2004 book, The Integrated Theory of Business Valuation, we focused the integrated theory on valuation at both the enterprise and shareholder levels of value. Then in 2007, we released Business Valuation: An Integrated Theory, Second Edition and the third edition was released in 2021. It’s evident that the integrated theory has been around now for many years. In this week’s post, we begin to relate the integrated theory to the standard of value known as fair market value.