CHAPTER 11
Valuation
IN CHAPTER 10, we discussed the components of value. With a strong understanding of these elements and how they affect valuation, we are ready to complete the assessment of the valuation filter in the Step-Wise Approach to Value (SWAV). This involves applying analytical techniques to monetize (put in dollar terms) the value of the Strategic Alternative (SA). Remember that we are calculating intrinsic value, which is an estimate of the value derived from the future cash flows of an SA. Since we are dealing with estimation, the outcome of this filter should not only provide a quantification of value, but an understanding of how good the estimate is. This assessment requires the use of numerous tools depending on the level ...
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