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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.

DCF 52
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M&A Blog #17 – valuation (Comparable Company)

Francine Way

Calculating the Equity Value and the per-share Equity Value - this number would serve as the base case share price valuation. The multiples calculation then proceeded as follow: Market Capitalization = Share Price * Fully-diluted Shares Outstanding. Performing sensitivity / scenario analysis using Monte Carlo analysis.

Valuation 130
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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.

DCF 52
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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. It is calculated by multiplying the current share price by the total outstanding shares. First, identify a group of similar publicly traded technology companies.

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Keeping Up with Delaware Appraisal Jurisprudence Since Aruba: Deal Price Reigns Supreme, But Will Recent Decision Lead to More Arbitrage?

Cooley M&A

share, which represented the portion of the deal price attributable to projected synergies. share to reflect the change in value of the target between signing and closing. share, a 2.67% increase over the deal price. share for changes in Regal’s value between signing and closing, which was less than the $7.32/share