A NOTE ON VALUATION OF COMPANIES WITH GROWTH OPPORTUNITIES by JOSE
نویسندگان
چکیده
I grate thank was p G12 Asset Pricing Each company faces day to day investment opportunities. Just by staying in business the company is taking a decision of reinvesting. These oportunities have to be fairly valued to overcome misallocation of resources. When a company has a contingent cash flow (growth option), and under particular circumstances this stream of cash flow is valued using the discounted cash flow technique, the value thus obtained will be higher than the true one. A method is proposed to solve this problem. Finally, technology and globalisation creates enormous growth opportunities, so misvaluation risks are higher.
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