In valuing a target of a merger or acquisition:

Question

Quizplus · Accepted Answer

Valuing a target in a merger or acquisition requires estimating and analyzing the cash flow from all of the target's product lines and businesses. This is because the value of the target lies in its ability to generate future cash flows, which are influenced by its diverse revenue streams. Simply using the market value of outstanding shares, the stock value over the last year, or the peak cash flow from the past can be inadequate and may not account for future growth potential.

In Valuing a Target of a Merger or Acquisition