What advice would you give to someone who was just starting to use modern valuation tools? (Please check all that apply.) a. It is important to perform sensitivity analysis around the most critical assumptions of a model. b. Ultimately, the value of a firm is negotiated between multiple parties, and discounted cash flows are only a tool that informs the negotiation. c. Using multiples to value a large, well-established, firm is always a better method than discounted cash flows. d. The terminal value (and our assumptions about long term growth rate) can have a disproportional effect on your calculation of the value of a firm. e. We need to take into account the possibility that the risk-free rate and the market risk premium change over time by using a higher beta in the discount rate
What advice would you give to someone who was just starting to use modern valuation tools? (Please check all that apply.)
a. It is important to perform sensitivity analysis around the most critical assumptions of a model.
b. Ultimately, the value of a firm is negotiated between multiple parties, and discounted cash flows are only a tool that informs the negotiation.
c. Using multiples to value a large, well-established, firm is always a better method than discounted cash flows.
d. The terminal value (and our assumptions about long term growth rate) can have a disproportional effect on your calculation of the value of a firm.
e. We need to take into account the possibility that the risk-free rate and the market risk premium change over time by using a higher beta in the discount rate
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