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Post 3 - Why does the conventional DCF not work for valuing a start-up/young firm?

Wizenius

Diversity in equity claims: In most of the cases of publicly traded firms with one class of shares, all equity claims on the firm are equivalent.

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

Francine Way

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. As we have previously covered what are needed to complete these steps in our DCF discussion , I would refer to those steps (9 through 12) here. They are basically the same for this exercise.

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Best Practices for Due Diligence and Valuation in M&A

Sun Acquisitions

Common Valuation Methods: Comparable Company Analysis: Compare the target company to similar publicly traded companies. Discounted Cash Flow (DCF) Analysis: Projects future cash flows and discounts them to their present value. Accurate valuation is essential for successful M&A deals.

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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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The Unseen Hand: Tariffs and Their Profound Consequences on Mergers & Acquisitions

MergersCorp M&A International

In an era marked by increasing geopolitical tensions and a re-evaluation of global trade relationships, tariffs have re-emerged as a potent tool of economic policy. This increased risk can lead to a higher weighted average cost of capital (WACC) for the target, further reducing its discounted cash flow (DCF) valuation.

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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. million Year 2: $2 million / (1 + 0.10)^2 = $1.65

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M&A Blog #22 – valuation (less known valuation methods)

Francine Way

Thus far, we have covered four popular valuation methods in M&A (DCF, Comparable Company, Precedent Transaction, and LBO) and one less known one that is making its way out of the academic realm into the business world (Dividend Discount Method, DDM). TBV is calculated as follow: TBV = total assets - total liabilities - goodwill.

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