Executive Finance – Business Valuation

Business ValuationThe ability of firms to create value for their shareholders is related to the way they treat their customers, employees and community.
Corporate Decision Making requires the following:
1- Capital Bufgeting Decision: Measure the NPV and IRR, if the NPV is +ve then the project creates value, if the IRR>WACC then we should invest.
2- Capital Structure Decision: Calculate the WACC, how much of the firms assets should be financed by equity and how much should be financed by debt?
3- Business Acquisition Decision: How much should be paid to acquire another company?
4- Foreign Investment Decision: How to account for multiple currency cash flows and for the different risks of operating in a foreign country.

Entry Barrier strategy to prevent competitors from entering the market:
1- Patents and Trademarks on Products
2- Building a Powerful brand name similar to Cocacola
3- Produce an innovative and attractively designed products that cannot be easily immitated by competitors such as APPLE products
4- Create a unique Distribution Channels similar to Dell computers, manufactured to order and delivered by mail
5- Try to be the market’s lowest cost producer such as samsung

 

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About Sultan

Senior Technology Architect with 10 years of experience in Europe, Asia, Africa, Australia, North and Latin America.
This entry was posted in Business Acquisition, Business Valuation, Capital Budgeting, Fiat, Foreign Investment. Bookmark the permalink.

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