--%>

Explain realization of name valuation in company

I suppose that a valuation consciously realized in my name tells me how much I have to offer for the company, am I right?

E

Expert

Verified

No. This implies to neglect, firstly, a valuation depends upon certain hypotheses of flow generation and risks (as the value always depends upon expectations); moreover a company will have various values for various buyers. And second thing, that the transaction will create no value for the buyer, if the acquisition price is equal to the value: if the price paid in an acquisition is equivalent to the value for the buyer then the value created through the acquisition equals zero.

Conversely, one should remember that value normally represents a number in a spreadsheet, whereas the price is frequently cash. Here is a huge difference among €20 million in cash and €20 million written in form an Excel spreadsheet or in form a valuation report.

   Related Questions in Corporate Finance

  • Q : In which cases use different WACCs Is

    Is this possible to use different WACCs within order to discount each year’s flows? In which cases?

  • Q : Who described option pricing with

    Who described option pricing with deterministic volatility?

  • Q : Define Credit and Collections Credit &

    Credit & Collections: Usually, credit is stated as the procedure of providing a loan, in which one party transfers wealth to the other with the expectation that it will be re-paid in full plus interest. The definition of collections is connected t

  • Q : Which data is the most suitable for

    Which data is the most suitable for finding betas?

  • Q : Finance You expect KT industries (KTI)

    You expect KT industries (KTI) will have earnings per share of $3 this year and expect that they will pay out $1.50 of these earnings to shareholders in the form of a dividend. KTI's return on new investments is 15% and their equity cost of capital is 12%. The value of a share of KTI's stock is clos

  • Q : Vanilla Bonds-Corporate Bonds Define

    Define the term Vanilla Bonds regarding Corporate Bonds?

  • Q : Illustrates beta and capital structure

    We are valuing a company, many smaller than ours, so as to buy it. As that company is too smaller than ours this will have no influence on the capital structure and at the risk of the resulting company. It is the reason why I believe this the beta and the capital stru

  • Q : What did better mean specified by

    What did ‘better’ mean specified with Markowitz questioned regarding portfolio selection?

  • Q : Attributes of debt securities What are

    What are the Attributes of debt securities?

  • Q : Calculating Beta when market

    A company with a market capitalization of $100 million has no debt and a beta of 0.8. What will its beta be after it borrows $50 million (giving that there are no other changes and no taxes)?