A Study on Corporate Valuation

A Study on Corporate Valuation

Mr. Bala Murugan. S ., B.com

MBA (Finance and Human resource) Student, Reg.No:43410346,

School of Management Studies,

Sathyabama Institute of Science and Technology, Chennai, Tamil Nadu.

Dr. Sasirekha.K, B.Sc., B.Ed., MBA., PhD

Assistant professor

School of Management Studies,

Sathyabama Institute of Science and Technology, Chennai, Tamil Nadu.

ABSTRACT

Corporate valuation is an essential part of financial management that helps determine the economic worth of a business entity. It plays a key role in strategic planning, investment decisions, and mergers and acquisitions. Understanding the value of a company allows investors and stakeholders to make informed financial choices. Several methods are commonly used for corporate valuation, including the discounted cash flow (DCF) method, which estimates a company's value based on its expected future cash flows, the market-based valuation approach, which compares a company to similar businesses in the market, and the asset-based approach, which calculates the value of a company based on its tangible and intangible assets. Each of these methods has its own advantages and challenges, making it important to select the most appropriate approach based on the specific situation. This study explores the fundamental principles, methodologies, benefits, and challenges associated with corporate valuation, providing insights into how businesses and investors can effectively assess a company’s financial worth.

Keywords: Corporate valuation, financial management, discounted cash flow, market valuation, asset-based approach.