SUMMARY
The value of a firm needs to be measured, and this value may be expressed in different ways. The intrinsic value of a firm’s assets is the present value of its future earnings discounted at an appropriate rate of return. The market value is the price at which the assets or securities of a firm are sold in the market. The book value of an asset is equal to its original cost minus depreciation. Again, the value realised from the sale of assets of a firm after it ceases to work is known as the liquidation value, while the going-concern value includes the goodwill and the growth factors. Lastly, the replacement value is the cost of replacing the firm’s assets in the current conditions.
The valuation of a firm includes the valuation of its ...
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