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How Finance Works
book

How Finance Works

by Mihir Desai
April 2019
Beginner
288 pages
7h 13m
English
Harvard Business Review Press
Content preview from How Finance Works

 

5 The Art and Science of Valuation

How to value a home, an education, a project, or a company

Whether you’re buying stock, acquiring a company, buying a house, or investing in education, you need to go through a process of valuation. Is the proposed investment justified? How much should you pay? These are all fundamentally questions of valuation, and finance has a rigorous set of tools for thinking about how to make those decisions. Consider the following examples:

In late 2012, Facebook reportedly made a $3 billion offer to purchase Snapchat. By 2016, Google had reportedly valued Snapchat at $30 billion. By mid-2018, the equity markets were valuing Snap at $17 billion. What were these wildly different numbers based on?

In mid-2018, Disney ...

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Publisher Resources

ISBN: 9781633696716