by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Discount Future Cash Flows Back to: ECONOMICS, FINANCE, & ANALYTICS Build-Up Method of Valuation In the “buildup method” valuation begins with the risk-free rate. The individual valuing the firm then makes the subjective...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Excess Earnings Method Back to: ECONOMICS, FINANCE, & ANALYTICS Discount Future Cash Flow Method The Discounted Cash Flow (DCF) method uses the projected future cash flows of the business after subtracting the operating expenses, taxes,...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Economic Value Added Method Back to: ECONOMICS, FINANCE, & ANALYTICS Excess Earnings Method Another earnings-based method is excess earnings. This method discounts company earnings based on two capitalization rates: a rate of return on...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Value of Dividends Method Back to: ECONOMICS, FINANCE, & ANALYTICS Economic Value Added (EVA) This methodology focuses on the return on investment expected from the company above the relative cost of capital. Take the amount of requested or...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Pre and Post-Money Calculations Back to: ECONOMICS, FINANCE, & ANALYTICS Value of Dividends Method This method relies on the idea that a stock is only worth what it will provide to investors in future dividends. If a business does not...
by TheBusinessProfessor | Feb 23, 2025 | Business Finance, Personal Finance, and Valuation Principles
[cite] Next Article: Angel Investor Methods Back to: ECONOMICS, FINANCE, & ANALYTICS Overview of Pre-Money and Post-Money Calculations The value of a business in a funding transaction begins with determining the pre-money and post money valuation. This valuation...
