Attractive value attributes:
Attractive user attributes
The dividend discount model
Because they are theoretical equivalent; i.e. they can all be derived from the dividend discount model
Multiples are a method which can be used to value firms. There are different ways that multiples can be applied. One way of carrying out a valuation is by using a multiple of a comparable firm on ‘the target’ firm’s earnings. For instance, if P/E of a comparable firm is 15 and net earnings of ‘the target’ firm are 100 the estimated market value of ‘target’ firm is calculated as 15 x 100 = 1,500.
Firms, which are compared, must have similar:
Furthermore, the multiples assume an efficient capital market
The asset based value represents the value of the alternative uses of the assets. In a healthy industry with attractive growth rates and attractive returns, a firm’s asset based value is typically less than its value as a going concern. In an industry with negative outlooks and poor returns, a firm’s asset based value may exceed its value as a going concern.
There are three types of asset based values: