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M&A Blog #17 – valuation (Comparable Company)

Francine Way

Determining the year-by-year future non-equity claims from the latest 10-K, especially those that will occur during the forecast horizon, and their combined present value. As we have previously covered what are needed to complete these steps in our DCF discussion , I would refer to those steps (1 through 7) here.

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Post 4 - Why does the conventional DCF not work for valuing a start-up/young firm?

Wizenius

The discounting factor would be typically more compared to the one used in publicly traded firms. This discounting factor is targeted rate of return of the VC investor and is set high enough to capture the foreseen/perceived risk of operating the business and chances of its survival.

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Methods and Examples on How to Value a Company

Lake Country Advisors

Market Capitalization Market capitalization is one of the simplest and most commonly used methods for valuing a publicly traded company. Example Scenario: Suppose XYZ Corp is a publicly traded technology company with 50 million shares outstanding, and the current share price is $20.

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Infrastructure Investment Banking: Definitions, Deals, and a Dizzying Diversity of Verticals

Mergers and Inquisitions

Global Trade A higher volume of global trade helps transportation and logistics companies, such as airport and seaport operators, and it also tends to help oil & gas pipeline operators in search of new markets. DCF: Deducts the full Interest Expense and deducts only Maintenance CapEx.

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The Dividend Discount Model (DDM): The Black Sheep of Valuation?

Mergers and Inquisitions

It can be useful for certain companies, such as power and utility firms and midstream (pipeline) operators in oil & gas … …but it’s also much harder to set up and use than a standard DCF. The basic set of steps looks like this: Step 1: Forecast Revenue and Expenses This is the same as in any other 3-statement model or DCF.

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Understanding Valuation Techniques in Mergers and Acquisitions

Sun Acquisitions

This approach relies on analyzing the market value of comparable publicly traded companies, known as guideline companies or multiples. Income-Based Valuation The income-based valuation method focuses on the target company’s ability to generate future cash flows and assesses the present value of these cash flows.

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Mergers and Acquisitions Valuation Strategies: Unlocking the Secrets to Successful M&A Transactions

Sun Acquisitions

Comparable Company Analysis (CCA): CCA involves comparing the target company to similar publicly traded companies. Discounted Cash Flow (DCF): DCF is a fundamental valuation method that estimates the present value of a company’s future cash flows. It involves forecasting cash flows and applying a discount rate.