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Perspectives on value and valuation

Abstract

In finance, value is the firm value which consists of fundamental value and shareholder value. Firm value can be based on book value or market value. Market value is based on the stock market performance of a company. The strategic relevance of knowledge assets has led to the generation of new concepts and models for managing a company’s knowledge assets. Value creation is often perceived as the future value captured in the form of increased market capitalization. Valuation is used in functional areas of finance like corporate finance, investment analysis, and portfolio management. The three basic approaches to valuation are discounted cash flow valuation, relative valuation, and real option valuation. ...

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