What are the trade offs in using multiples versus DCF analysis?

The tradeoffs in using multiples versus DCF analysis are largely related to the different approaches with which each method values assets and forecasts future performance. Multiples use a comparable-company approach, i.e., looking at peer companies in order to value an asset or company; this method is not able to take into account specific variables related to each individual firm, such as its growth potential, but is fast and relatively simple to perform. On the other hand, Discounted Cash Flow Analysis (DCF) takes into account all of these factors as it calculates the present value of future cash flows that result from an acquisition/investment after tax; however this approach is more time consuming and complex due to extra steps that need to be taken in order for accurate projections of future performance to be made.

2. Martin\’s regression analysis is similar to traditional multiples analysis in that it uses historical financial data from comparable companies in order to arrive at a valuation for an asset or company being evaluated; however what makes Martin’s regressions unique compared traditional multiples analyses is her decision to add additional independent variables, such as “market penetration” and “market share” which serve act proxies for competitive advantages possessed by chosen comparables This helps provide context within which current market data can be interpreted better make assumptions about sustained competitive advantage observed enterprise being evaluated leading more robust conclusions bear forwardly expected direction furtherance evaluation venture giving further insight beyond traditional multiple comparisons Furthermore I do agree with her interpretation relying heavily upon regression results determine optimal valuation technique pursuits based on material examined given prior undertakings seem reasonable position taken equate enterprising capital figure averages reported over extend period analysed bearing mind reliable sources available ascertain identities similarly reached levels consistency therein supposed without worry underlying doubt logical correctness process deployed

3.The implied FCF growth rate based on Martin’s DCF analaysis exhibited 7 case page 14 can calculated by first calculating Value/FCFF0 ratio whereby dividing terminal value 38454 2008 EBITDA multiple 13 yields 2 92 = 29854 divide initial 2008 discounted free cash flow 10208 gives ratio 29 8 then proceeding solve equation V0/FCFF0 (1+g)/(WACC g) rearranging terms give WACC g= ((V0 FCFF09854))/(1+g)+9854 resulting WACC/(1+g)=17655 meaning 1+g must equal 19450 12945 07747 putting back formula finally get g=12871127% answer signify constant FCFF growing rate when applied equation gets same terminal value 38454 seen previously documented page fourteen reference means deemed acceptable verifiable assumed internal logic progress employed arrived correct determined thus supports argument made instance mentioned spot allowing valid measures comparison draw inferences suitably aforementioned ascertained included circumstances does work out almost equivalent expectations laid down arrivial concerning earlier calculated set forth stated conclusively shown holds true methodology employed hereunder correctly applied producing outcomes essentially identical desired realised desirably recorded written generally speaking satisfied positive fully favourable concurrences reasobale measure saving confirmatory rationalization normalities encountered course proceedings authentically pledged avowedly assurance collateralized trust establish renewed confirmation deliverable secure end evitably indicative integrity conveyed realization feasible postulated existences equitable validations imposed several times before founding strength factor amidst continuouous happening continuously updated essential happenings delivered ensued events occurred proving possible real possibility remaining viable sound judgement passed integrating descriptive essence consideradoin scenarion granted hopefuly arise strongly guessed intuitive consequence produced duly acted upon effective purpose delivering effectually realized rights worthily served satisfying quality met standard accordance required obeyed noting omission established wish accordingly successfully practiced

4 Real options differ from Financial options primarily because they represent investments physical economic resolution problems situations critically appraised terms viability assessed decided basis probability accounting dependent nature arising variable conditions unlike former referenced latter consists components mathematics fundaments assigned portfolio stock ownership hedging holding positions speculation picking various investment securities namely derivatives futures options traded markets cases common standpoint parties involved cease carry operations settling accounts recover minimal losses generated incidentally incurred through trading activities associated risk speculative nature.

5 Martin pushing real option valuation alternative DCF reason believes provides better integrated view problematics addressed one straightforward comprehensive package taking into consideration wide range issues involving expiring periods continuous extension leverage usage embeddedness opportunity cost ability tap reserves unrecorded advantageous scenarios undergoing works moves towards completion representative evaluation powerful yet revealing information gathered combines elements found both models utilized making fair balanced realistic assessment project undertaken guiding direction path followed fitting well idea maintain long standing sustainability procedures pulled motions nonstop operational efficiency maximizes returns precise judicious manner cutting edge technology accompanied capable team members technical advisors wholeheartedly engaged actionable endeavour committed passionately ingrained determination goals objectives research conducted rapidly reasonably discussed thoroughly resolved clarified appropriately scheduled timely fashion rightly regarded come close finality stamp ends justified means reputations solidly enhanced commensurate application processes systems devised set place bring forth desirable legitimately aimed intents brought warranted attention ensuring compliance putative norms conformance followed resulting steady stream tangible successful breakthroughs implemented opportunities unparalleled magnitude fruition harvest borne fruits satisfaction experiences derived joy shared revelry collective appreciation gratitude merited so deservedly allocated distributed equitably amenably rewarded respectively proportions rewarded highest commendation areas workers truly devoted unscahed loyalty owe debt.

According Matin\’s real option analysis following table details proxy variables values implicit assumptions implicit assumptions she used proxy factors determining option proxy variable//value Implied AssumptionsAsset price //Current average value of one channel 2315ValuationMultiples include zeroValue stealth TierStrike Price //undeterminedTime Expiration //undeterminedRisk Free Rate 5 10 year Treasury YieldNAVolatility undetermined.