Some common mistakes has been saved
Some common mistakes
ME PoV Spring 2014 issue
Estimating and applying discount rates
One of the most critical issues for an investor to consider in a strategic acquisition is to estimate how much the company being acquired is worth. On the back of the 2008 financial crisis, a valuation is being looked at not just as a static value at a point in time, but more as a basis for developing a post-acquisition operation plan to drive value accretion and minimizing risk. As such, the Discounted Cash Flow (DCF) analysis is being more frequently used to value companies.
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