Question

Submit a written paper which is 3-4 pages in length, exclusive of the reference page. the Abstract is not required or needed. Papers should be double spaced in Times New Roman font which is no greater than 12 points in size. The paper should cite at least one source independent of the textbook.

In this paper, please discuss the major methods of company valuation that we have studied. In doing so, explain each method and compare their advantages and disadvantages with the other methods you choose to discuss. Support your discussion with references.

Papers will be assessed on the following criteria:

• Explain the market capitalization.
• Explain the book value.
• Explain (expected) future earnings.
• Provide narrative on other methods (minimum of two).
• Compare market capitalization, book value, and future earnings methods (and your other chosen methods) with each other to include their advantages and disadvantages.

Answer 1

Explain the market capitalization.

Market capitalization refers to the total dollar market value of a company's outstanding shares of stock. Commonly referred to as "market cap," it is calculated by multiplying the total number of a company's outstanding shares by the current market price of one share

Explain the book value

Book value refers to the total amount a company would be worth if it liquidated its assets and paid back all its liabilities. Book value can also represent the value of a particular asset on the company's balance sheet after taking accumulated depreciation into account

Explain (expected) future earnings

Future Earnings. Earnings that, if it had not been for an injury, could have been made in the future, but which were lost as result of the injury.