Valuations
For every investment in the market, one needs to evaluate the asset/security and in effect decide whether the returns justify the risks or not. It is very important to be aware of the various methods of establishing value to an asset.
Damodaran says “one must systematically examine the three basic approaches to valuation - discounted cash-flow valuation, relative valuation, and contingent claim valuation - and the various models within these broad categories.”
Valuation of financial assets is done using one or more of these types of models:
1. Relative value models determine the value based on the market prices of similar assets.
...... ..... .. READ MORE :clap2:
For every investment in the market, one needs to evaluate the asset/security and in effect decide whether the returns justify the risks or not. It is very important to be aware of the various methods of establishing value to an asset.
Damodaran says “one must systematically examine the three basic approaches to valuation - discounted cash-flow valuation, relative valuation, and contingent claim valuation - and the various models within these broad categories.”
Valuation of financial assets is done using one or more of these types of models:
1. Relative value models determine the value based on the market prices of similar assets.
...... ..... .. READ MORE :clap2: