What are four methods for estimating a target’s value?

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter4: Accounting For Factory Overhead
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What are four methods for estimating a target’s value?

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The four methods for estimating the target’s value are discussed as follows:

DCF method – This is one of the finest methods in the industry. To find the value of the firm by this method, the analyst simply estimates the fund flows for various periods with the help of growth rate and then pull it back today with the discount rate to find the worth of the company.

 

Relative Valuation – In this type of valuation, the company estimates the worth of the target by checking the relative transaction in the industry. In this method, the company will adjust the value for the differences and come with the actual value.

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