Company Valuation

Allocating funds to an investment opportunity usually means taking a closer look at valuation readings to better understand the premium or discount on a deal. Real estate, venture capital, and direct investments, among other asset classes, are subject to this scrutiny. Particularly in the case of illiquid investments, valuation is an art. Finalizing guidance on price commonly generates conflicting opinions between buyer and seller. One truism: a seller will often contend that a deal is worth more than it probably is.

Company Valuation

Churn Is Valuation Flare

30 May 2022

Customer retention is essential to business survival. It measures the underlying health of a firm. In April, Netflix announced it had lost some 200,000...

Featured Selection

The Dark Side of Valuation
Valuing Young, Distressed, and Complex Businesses
Aswath Damodaran

This MBA-level textbook, now in its third edition, was published in 2018, well before Covid-19 existed. Yet, the material is essential today, as buyers and sellers of companies wrestle with valuation as the fundamental issue of a transaction. How do set the price for a company when its intrinsic value (cash-flow potential and its risk) is indeterminate? “A common response is to bend the rules of valuation and use shortcuts to justify whatever price they are predisposed to pay for the company.” Aswath Damodaran refers to this approach as the “dark side of valuation.”

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