Valuation of a High Growth Business


Comparing a Dynamic Company 
to Similar Firms on the Stock Market
is the Simple Approach to Valuation



The valuation of a high growth business is a key concern for the owners of the enterprise as well as outsiders such as prospective investors. As an example, a corporate buyer that plans to acquire the high flyer has to figure out how much the business is worth. The same is true of a savvy investor who wants to buy a block of shares in a company listed on a stock exchange.

A simple way to gauge the value of a business is to compare it to similar firms in the equity market. The matchup against listed firms is directly relevant, for instance, in the case of a public offering of shares. However, the same analysis can serve as a point of reference in other settings. An example of the latter is a decision by the owners to sell the company, whether in whole or in part, by way of a private transaction.

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