what s the need of valuation, why shall we valuate our company? what s the benefit of valuating a company?

i just completed Part3 of the course( share and valuation) , for summarizing, what s the need of valuation, why shall we valuate a company and what s the benefit? and how many kind of valuation we have, and which the most used? jus to better understand this part

1 Answer(s)


Valuation is used to fundamentally understand how much a company is worth. For example if you want to buy a house or a car you first need to know how much to pay for that. Similarly when you want to buy a companies shares you want to understand how much the company is worth. Its the same idea.

There are 3 popular valuation methods - DCF, Comparable Trading and Comparable Acquisitions. Usually all 3 are used to understand the rough valuation of a company.

Your Answer

Click on this code-snippet-icon icon to add code snippet.

Upload Files (Maximum image file size - 1.5 MB, other file size - 10 MB, total size - not more than 50 MB)