Valuation Suggestions for project

Hello! I'm new here and have a problem that I need help with. I am taking a class in Investment Banking this semester and want some help from more valuation-savvy people.

I have a project for class and decided on this theme: Take a company, try 4 different valuation methods on it, compare the results and write an essay about the comparisson.

What I would like help with is finding what methods I should use. I've been trying to find some but it's still unclear to me and my deadline is near, so any suggestions are very appreciated!

Thanks in advance

2 Comments
 
Best Response

Income Approach: based on company's earnings and market-based discount rate Discounted Cash Flow Method or Direct Capitalization method (you can only use one, not both)

Market Approach: uses guideline company multiples Public Company Method - minority interest acquisitions of stocks publicly traded M&A Method - controlling interest acquisitions

If you were to try a fourth "method" you could run an LBO, but this technically is not a "valuation method." LBO is basically a backwards more complicated DCF used to back-solve for an IRR based on various levers.

 

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