Tag Archives: Relative valuation

2 things to keep in your mind for the market approach model!

  Market Approach Model, Selection of Comparable companies, and Calculation of Valuation Multiples   The market approach model (relative valuation) is useful when estimating a private company’s market value. The way is to estimate the market value of a target company by referring to a market multiple of listed companies on the stock market similar […]

Why analysts prefer relative valuation multiples?

valuation mutiples - jcinus

  Types and uses of the Relative Valuation Multiples   The relative valuation model is a method of indirectly estimating or judging the market value of a target company by referring to the market price of comparable companies that have similar properties to the target company. The numerator’s market price in the formula below can […]

PBR and Evaluating the Stock Price of Tesla and Toyota

PBR (Price to Book Value Ratio) refers to how many times the market evaluates about the book value of equity for a company. The market will trade it at a higher price when it expects the company to generate more cash flows with equity capital in the future. Suppose company A and company B have […]

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