BU121 Study Guide - Final Guide: Cash Flow, Leveraged Buyout, Preferred Stock
Document Summary
Income approach: based on the assumption that value of the biz = sum of the present value of any expected future benefits (income stream and/or liquidity event) Market approach: value is determined based on comparisons to similar companies for which values are known. Cost approach: value determined as measure of net cost of assets or original amount invested. Income approach methods: discounted cash flows; free cash flows. Market penetration (sell more of current product to current customers) Market development (sell current product in different markets) Alternative channels (changing to a different distribution channel) Product development (develop new products to sell to existing customers / new ones) Integrative: horizontal (acquire/merger with a competitor) backward(acquire/merger with supplier ) forward (acquiring or merger with distributor ) Diversification: acquiring a firm in another completely different industry. Key consideration: key transition occurs during the growth stage (shift from ent to manager); need to transfer that spirit to employees while making transition to more managerial style.
