Which valuation method would create the highest value for very large publicly traded conglomerates?
none of the above
- 9 years agoFavorite Answer
The answer would be : case to case.
It depends on a particular company at particular time, in a particular situation such as economy, existence of a market.
Liquidation approach might yield a low value, if there are no willing buyers for the individual assets.
But it might yield a high figure if the underlying assets such as land have many potential buyers.
Market approach might yield a low value, if the market is not deep enough or if the market is on a downtrend. But it might yield a high value, if the market is deep enough or if the market is on an uptrend.
Income approach might yield a low value, if interest rate is high. It might yield a high value if interest rate or discount rate used is low.
Replacement approach might yield a low value if the economy or price is going down. It migh yield a high value is economy or price is going up.