Which valuation method would create the highest value for very large publicly traded conglomerates?

liquidation approach

market approach

income approach

replacement approach

none of the above

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  • 9 years ago
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    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.

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