The document discusses various approaches to company valuation, including adjusted book value, dividend discount model, and comparable company analysis. It highlights the importance of fair market value adjustments and notes limitations related to intangible assets and contingent liabilities. Several valuation methods are mentioned, such as free cash-flow and liquidation value assessments.

1. ADJUSTED BOOK
VALUE APPROACH
Makes some tweaks to the book
value method by adjusting both the
values of assets and liabilities by the
fair market value. But, it still fails to
consider the effects of intangible
assets and contingent liabilities.
Value of shareholder’s equity
presented on the balance sheet of a
company.
BOOK VALUE
APPROACH
(Last dividend payout x (1+ dividend
growth rate) ) / (Cost of Equity – dividend
growth rate)
DIVIDEND DISCOUNT
MODEL (DDM)
These methods assume that the
value of the firm or the equity is the
sum of the discounted values of the
cash-flows to the firm or to the
equity holders of the firm.
FREE CASH-FLOW
METHODS
LIQUIDATION
VALUE
Valuation of the company as if the
assets of the company are sold and
the liabilities paid pack.
COMPARABLE COMPANY ANALYSIS
This analysis assumes that comparable companies in the same
industry should have similar valuation multiples such as EV/EBITDA,
P/E, EV/Sales, EV/EBIT etc. So, we can determine the value of a
company using comparable companies.
VALUATION
METHODS
BALANCE SHEET
METHODS
DISCOUNTED CASH-
FLOW METHODS