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SPECIAL CASES OF VALUATION
What is the primary challenge in valuing a startup company that has no historical earnings?
Startups lack historical financial data, so valuation relies on discounted cash flow projections, comparable transactions, or the venture capital method using expected future exit multiples.
What is 'Negative Goodwill' and how is it treated in company valuation?
Negative goodwill arises when purchase price is below net asset value.
How is the valuation of a loss-making company approached under the asset-based method?
For loss-making companies, the net asset value (NAV) or liquidation value is used, reflecting the realizable value of assets after settling all liabilities.
What is the 'Excess Earnings Method' used for in business valuation?
It values intangibles by capitalising earnings above a normal return on tangible assets.
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