Valoracion de Empresas

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rP os t 9-206-095 REV: OCTOBER 31, 2006 ROBIN GREENWOOD LUCY WHITE Introduction to Valuation Multiples Table 1 op yo A multiple is a market price per unit, which, when multiplied by the number of units, gives the value of those units. We use multiples regularly in our everyday lives without even realizing it. For example, to determine the value of a bag of fish, we multiply the price of fish per pound (the multiple) by the weight of fish in the bag (the number of units). Below are some more examples of multiples you may have used. Everyday Multiples Quantity X Pounds of fish Bushels of apples Gallons of gasoline Number of square feet X X X X Multiple $ per pound $ per bushel $ per…show more content…
If you are studying a firm with a cash flow of $5 million and you believe it should be valued at a cash flow multiple of 10, you will determine that the firm is worth $50 million. Where Do Cash Flow Multiples Come From? PV = tC Although it may sometimes seem that multiples fall from the sky, they are related in a precise way to the valuation techniques you already know. Recall that the value of the firm is equal to the discounted sum of the future (unlevered) cash flows: CF1 CF2 + + ... 1 + r (1 + r ) (1) No When the cash flows are growing at a constant rate g, the value of the firm is PV = CF1 CF (1 + g ) CF1 (1 + g ) 2 + 1 + + ... (1 + r ) (1 + r ) 2 (1 + r )3 PV = CF1 r−g (2) Do Note that in the expression above, the value of the firm is equal to a constant (1 / (r-g)) times the cash flow today. This means that, the value of a firm in which cash flows are appropriately discounted at a rate r and are growing at a constant rate g can be calculated by using a

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