A Note on Valuation of Companies With Growth Opportunities

Topics:
Valuation
Tags:
Finance,
Growth Opportunity,
Investment,
Valuation
Source:
Universidad del CEMA

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Overview: Each company faces day to day investment opportunities. The question arising for those managers who have the responsibility of allocating capital is the criteria they should use to differentiate between investment alternatives. The most proven, traditional and popular method of valuation is Discounted Cash Flow (henceforth DCF), which provides comparable information. This method requires both the assessment of expected future cash flows and a risk adjusted rate (used in the discount coefficient). Besides the current business the company is in, it can also face horizontal or vertical growth opportunities should events unfold favorable.

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Format: PDF | Size: 72KB | Date: May 2000 | Pages: 26


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