10.3. Valuation
There are four basic ways of valuing a business:
Earnings capitalization valuation
Present value of future cash flows
Market-comparable valuation
Asset-based valuation
No single method is ideal because the value of a business depends among other things on the following:
Opportunity
Risk
Purchaser's financial resources
Future strategies for the company
Time horizon of the analysis
Alternative investments
Future harvest
The valuation of a small, privately held corporation is difficult ...
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