www.thealphareview.

com Equity Valuation: Application

- Difference:
Absolute Valuation - Without regard to other firms (DDM, DCF, Asset Based)
Relative Valuation - With regard to other firms (Comparables method and multiples ie. P/E, P/B, P/S, EV/ EBITDA)

- Valuation approaches applicable when:

1. Sum of Parts - Separate valuation of different divisions
2. Liquidation value: - Company going out of business
3. Investment value: - when synergies are perceived with existing buyers assets

- Conglomerate discount: Applied to a firm that has operations in different industries