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Approaches and Methodologies Considered When Appraising Your Business

BV Specialists

Under a “Capitalization of Earnings” approach, the appraiser will consider both historic and future income probability, based on a steady stream of revenue, and discount these streams to realize a net present value, while using appropriate rates of capitalization. Market Approach.

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Issues faced when valuing a declining company

Andrew Stolz

Discount Future Cash Flows – either by using the Mid-Year discount or a simple discount period, it is fairly simple to calculate the present value of future cash flows. Another DCF concern happens when the analyst wants to determine the terminal value of a declining company.