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Explain the process-methodology to the client

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Reference no: EM133254012

Assignment:

ABC Corp is confused about the valuation methodology of privately owned corporations versus publicly traded corporations. Assume, the subject corporation and recently comparable sold private corporations only finance with private funds, and both the subject and comparable corporations' CFFA grow at a constant rate.

You also know of three comparable sales:

  • Comp 1 sold for $100,000,000 with of $6,000,000 annually and a growth rate in CFFA assets of 3%.
  • Comp 2 sold for $110,000,000 with of $6,500,000 annually and a growth rate in CFFA assets of 3%.
  • Comp 3 sold for $100,000,000 with of $7,000,000 annually and a growth rate in CFFA assets of 3%.

You are to pick a for the subject corporation between $5,000,000 and $7,500,000 and a growth rate (g) in the subject corporation's CFFA between 5% and 7.25% and then value the subject corporation taking care to explain the process/methodology to the client.

Reference no: EM133254012

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