Editing Stockhub
The edit can be undone. Please check the comparison below to verify that this is what you want to do, and then publish the changes below to finish undoing the edit.
Latest revision | Your text | ||
Line 372: | Line 372: | ||
|Discounted cash flow | |Discounted cash flow | ||
|There are two main approaches to estimate the value of an investment: | |There are two main approaches to estimate the value of an investment: | ||
#By calculating the present value of the investment's expected future cash flows ( | #By calculating the present value of the investment's expected future cash flows (discounted cash flow valuation); and | ||
#By comparing the investment to other similar investments ( | #By comparing the investment to other similar investments (relative valuation). | ||
Research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach<ref name=":5">Demirakos et al., 2010; Gleason et al., 2013</ref>, so that's the approach that Stockhub suggests to use here; nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the using the relative valuation approach (the valuation based on the relative approach can be found in the appendix of this report). | Research suggests that in terms of estimating the expected return of an investment over a period of 12-months or more, the approach that is more accurate is the discounted cash flow approach<ref name=":5">Demirakos et al., 2010; Gleason et al., 2013</ref>, so that's the approach that Stockhub suggests to use here; nevertheless, for completeness purposes, separately, the valuation of the company is also estimated using the using the relative valuation approach (the valuation based on the relative approach can be found in the appendix of this report). |