--%>

Which method must use to valuate young companies

Which method must we use to valuate young companies along with high growth but uncertain futures? Two illustrations were Boston Chicken and Telepizza while they began.

E

Expert

Verified

The great majority of analysts confess that this is very difficult to realize projections of flows of young companies along with uncertain futures. Although Fernández (2004) shows that we can predict a future year wherein the company would already be consolidated; which is, starting from which particular year the company must have a moderate growth.

The capitalization which year must be today’s capitalization revaluated at the needed return. If such capitalization looks reasonable, therefore today’s quotation is also reasonable. But if this looks exaggerated, so the company today is overvalued. A same method is to compute the flows essential to justify future capitalization and to weight its magnitude.

   Related Questions in Corporate Finance

  • Q : Who explained market-neutral delta

    Who explained market-neutral delta hedging?

  • Q : Explain merits and demerits of standard

    Explain merits and demerits of standard market practice to find the volatility as a function of underlying.

  • Q : What is Regular supply of working

    Regular supply of working capital: The working capital requirement (WCR) estimation helps to ensure that the supply of raw material, which is essential to production, is uninterrupted. Therefore, the firm will be able to get sufficient credits and fun

  • Q : Calculate the risk-free rate You have

    You have been given the following information on two corporations; you are to assume that thesecurities are correctly priced. My Corp, Inc. has a Beta of 1.25 and an Expected Return of .145;Your Corp, Inc. has a Beta of .75 and an Expected Return of .095. Based on the

  • Q : Compute the present value of the

    Is this possible to value companies by computing the present value of the Economic Value Added (EVA)?

  • Q : Explain essential hypotheses for

    Which are the essential hypotheses so that valuations of the Economic Value Added (EVA) give similar results to discounting cash flows?

  • Q : Which method must use to valuate young

    Which method must we use to valuate young companies along with high growth but uncertain futures? Two illustrations were Boston Chicken and Telepizza while they began.

  • Q : What is Box Spread Box Spread: This is

    Box Spread: This is another strategy which seeks to exploit the arbitrage opportunities which are available in the market. In case that the options are correctly priced, this strategy would earn only the risk free rate. However, due to existence of im

  • Q : Who explained put–call parity Who

    Who explained put–call parity?

  • Q : Variance of a portfolio The variance of

    The variance of a portfolio of 40 stocks will be the addition of _______ variance terms and _______ covariance terms. A) 40; 1560B) 40; 1600C) 80; 40D) 1600; 40