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Calculating cost of debt, cost of equity, and weighted average cost of capital (WACC). While different valuation professionals differ on which multiples to use based on the target’s industry, and so on; a few multiples have became analysts favorites: TEV/Revenue, TEV/EBITDA, and TEV/Tangible Book Value.
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.
Lana also co-authored a book about investing in real businesses. The book covers the steps that can be taken to make a business worth buying, such as understanding the market, preparing for the sale, and understanding the legal aspects of the transaction. They work to restructure debt, keep businesses open, and protect personal assets.
Essentially, comparable company analysis looks at the value of publicly traded companies. Book Value of Assets: This approach is particularly useful for companies such as manufacturers and warehouses, where the business is heavily dependent on its assets. As a result, the value of the company lies in its ability to repay the debt.
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