QUESTION- FINDING COMPANY VALUE TRADING AT PREMIUM- PLEASE HELP!!!!
HI,
If a company is trading at 1.95 billion dollars at a 64% premium, how much is the company worth?
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A premium to what? Your own fundamental valuation (i.e. DCF), trading peers, broker/consensus estimates?
That range of potential comparisons for your "base value" already tells you that valuation is inherently subjective. But if it's a frequently and publicly traded stock, the actual price (no matter how high the premium) is probably a good indicator of the worth of the equity. Then you add a control premium (probably in a range of 20-30% but also that can be more or less) and of course adjust for financial net debt.
I understand what you're saying and you're completely right however I'm just looking for in simplest terms, simple math if something is sold for 64% more than its worth and that sale price was 1.95 billion, how much should it actually be worth?
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