Finance

Student’s Name Professor’s Name Subject DD MM YYYY A Note on Valuation in Private Equity Valuation is a vital process that evaluates the value of an asset useful in analyzing investments and in financial reporting among others. Valuation methods have implications for private equity practice, but some approaches can lead to better decision making in investment when reasonable assumptions are made. The first is the Discounted Cash Flow method which has two approaches namely: CCF (Capital Cash Flows) and WACC (Weighted Average Cost of Capital) (Goppers 1). This method first determines unbiased cash flows from operations which are independent of the o’s capital structure. A common mistake...

Name Instructor Course Date Valuation for Venture Capital The determination of the value of a company before investing into is a blistering challenge for venture capitalists. There exist various arbitrary methodologies of valuing a company such as net present value and comparables. However, these methods retain loopholes in valuating private companies. These companies rarely have substantial or consistent operating histories to base their forecasts of revenues in the process of valuation. Innovating companies offer more promise than generic companies in such a case do. Frequently, the subjective and optimistic view of entrepreneurs might cloud the actual value of a company. However, venture...

Net Present Value From a Personal View Name Institutional Affiliation Net Present Value (NPV) is an intrinsic valuation method that relies on the future cash flows of an investment to determine its viability. Normally, projects with negative NPV values are declined while the positive NPV values are endorsed in their order of increment (Gallo, 2014). All the future cash flows are discounted to the present period to determine their present values. Although a personal decision does require a future projected cash flow, the decision made should at least leave a positive balance between the current and the expected position. Three years ago, I was faced with a difficult decision to make concerning...