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SPECIAL CASES OF VALUTION
What is the primary challenge in valuing a startup company that has no historical earnings?
Startups lack historical earnings, so valuation relies on discounted cash flow projections, comparable transactions, or the venture capital method using expected future exit multiples.
What is the 'Scorecard Method' used to value pre-revenue startups?
Compares startup to benchmark using weighted qualitative factors.
How is the valuation of a loss-making company typically approached?
Loss-making companies are valued using asset-based methods, EV/Revenue or EV/EBITDA multiples, or DCF with a turnaround assumption projecting future profitability.
How is the 'terminal value' adjusted when valuing a cyclical company at the peak of a cycle?
Normalized earnings at mid-cycle are used to compute terminal value.
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