Session 12: Equity Investments: Valuation Models Reading 46: Private Company Valuation
LOS d: Discuss the income, market, and asset-based approaches to private company valuation and the factors relevant to the selection of each approach.
Which of the following approaches to private company valuation uses discounted cash flow analysis?
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C) |
The asset-based approach. | |
The income approach values a firm as the present value of its future income. The asset-based approach values a firm as its assets minus liabilities. The market approach values a firm using the price-multiples from the sales of comparable assets.
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