What Is an Exit Valuation

question 16

Multiple Choice

What is an exit valuation?

• A) Value of the business at the time of exit, IPO or acquisition
• B) Value of the business after your 5 year projections
• C) The industry average value of companies in your industry of the same age
• D) The amount of money investors are willing to invest

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Definitions:

Flotation Cost

The total costs a company faces in issuing new securities, including underwriting, legal, and registration fees.

Cost of New Stock

The costs associated with issuing new shares of stock, including the underwriting and administrative costs.

Retained Earnings

The portion of net income that is retained by a company rather than distributed to its shareholders as dividends.

Coupon Rate

The interest rate on a bond which the issuer pays to the bondholders, generally fixed and paid at specific intervals.