Question

In this paper, please discuss the major methods of company valuation that we have studied. In doing so, explain each method and compare their advantages and disadvantages with the other methods you choose to discuss. Support your discussion with references.

Papers will be assessed on the following criteria:

• Explain the market capitalization.
• Explain the book value.
• Explain (expected) future earnings.
• Provide narrative on other methods (minimum of two).
• Compare market capitalization, book value, and future earnings methods (and your other chosen methods) with each other to include their advantages and disadvantages.

Answer 1

There are various programs that depend upon the expected criteria set by the department. Though, the primary purposes include the normalized advantage, business judgment, fair capitalization procedure, book value process, including future earning system.
The order normalized value gets financial data, particularly, the profit of the firm's current back-to-back years to obtain the average profit.
The means business appraisal measures the value of a business and comments with consideration to the trading cost of a mutual company or stocks. It implies this method takes charge of business into compensation for valuing the business.
The market capitalization process is utilized to evaluate the company based on the business value of its dividends. The most important market capitalization intimates the company works great in the market.
The book value plan incorporates the company’s net assets to discover the importance of the partnership. It is regulated by reducing total assets from infinite assets.
Future earnings process is one of the basic methods admitted by all the businesses which serves to know the PV of the organization with the demanded future incomes. This method includes coordinated PV and the weighted average cost of assets.

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