Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. our typical valuation tools rely on either discoun

Our typical valuation tools rely on either discounting future cash flows of the firm or using...

90.2K

Verified Solution

Question

Finance

Our typical valuation tools rely on either discounting futurecash flows of the firm or using multiples of EBITDA (based onobservable comparable firms).How well would these tools work if thefirm is many years away from positive free cash flow and currentlyhas negative EBITDA or has positive EBITDA but is expected to growmuch more quickly than observable comps?

Answer & Explanation Solved by verified expert
4.3 Ratings (609 Votes)
Present Value of the expected future cash flows is derived using a discount rateOne of the biggest challenge is finding the right discount rate and estimating the cash flows with certainty Now if the firm is many years away from positive cash flow and at present the cash flows are    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Our typical valuation tools rely on either discounting futurecash flows of the firm or using multiples of EBITDA (based onobservable comparable firms).How well would these tools work if thefirm is many years away from positive free cash flow and currentlyhas negative EBITDA or has positive EBITDA but is expected to growmuch more quickly than observable comps?

Other questions asked by students

Q

For each item, select \"Absorptive\" or \"Post-absorptive\" depending on which state is correct. 1 skeletal muscle builds glycogen 2 excess...

Medical Sciences
Q

1) Explain how different engine operating conditions affect combustion ( ignition delay, temperatures, air fuel ratio,...

Mechanical Engineering
Q

Which of the following is NOT one of the functions of vascular tissue in plants...

Biology
Q

ype answer rounded to 1 d p with one space between the number and the...

Calculus
Q

Find the quotient Round to 3 decimal places 45 0 282

Calculus
Q

7x4 8x 13x4 16x 1 lim a x 5 A B 0 C 1 D...

Calculus
Q

Explair Developing Skills In 3 8 determine if each sequen common difference 3 2 5...

Algebra
Q

Examples of unethical behavior when trying to meet a budgeted target include:

Accounting
Q

Cullumber Co., organized in 2016, has set up a single account for all intangible assets....

Accounting
Q

Extracts from the budget for Quantum Oak Ltd is shown below: ...

Accounting
Q

Marchiesa Partners provides management consulting services to government and corporate clients. Marchiesa has two support...

Accounting
Q

Suponga lo siguiente: Ganancia en la venta de propiedad personal comprada en Filipinas...

Accounting