Explain How Valuations Can Differ Between Public and Private Companies

question 35

Essay

Explain how valuations can differ between public and private companies and between young and mature companies as well as the importance of marketability, control, and key person considerations in valuation.

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Definitions:

Equity Modes

Different methods a company can use to enter and operate in foreign markets, typically involving significant ownership and long-term commitment, such as joint ventures or subsidiaries.

Large Investment

Substantial financial commitment in assets or projects expecting future returns.

Equity Modes

Various methods or approaches for a company to raise capital through the sale of shares in the business to investors.

Joint Ventures

Business arrangements where two or more parties agree to pool their resources for the purpose of accomplishing a specific task, project, or business activity.