The ___________ approach in an M&A setting attempts to determine the enterprise value or value of...
The ___________ approach in an M&A setting attempts to determine the enterprise value or value of the company, by computing the present value of cash ?ows over the life of the company.
A) net present value
B) synergy
C) payback
D) internal rate of return
E) discounted cash flow
Homework Answers
ANS: E) Discounted Cash Flow
All the free cash flows in M & A settings is computed and depreciation, capital expenditure and change in net working capital is treated on free cash flows, then the cash flows is discounted by required rate of return and brought to present value in order to determine the enterprise value.
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