What are the three key inputs to the valuation model?
As per Gitman (2006), there are three main inputs to the valuation model: Cash flows, timing, and measure of danger.
Cash flows: "The value of any asset depends on the cash flow" (Gitman, 2006).
Timing: "The combination of the cash flow and its timing fully defines the return expected from the asset" (Gitman, 2006).
Measure of risk: "The level of risk associated with a given cash flow can significantly affect its value" (Gitman, 2006).
How would you determine the valuation of an asset?
"?the value of any asset is the current value of all future cash flows it is anticipated to make over the applicable time period. The time period could be any duration, even infinity. The value of an asset is consequently determined by discounting...
Excerpt from file: Whatarethethreekeyinputstothevaluationmodel? AsperGitman(2006),therearethreemaininputstothevaluationmodel:Cashflows, timing,andmeasureofdanger. Cashflows:Thevalueofanyassetdependsonthecashflow(Gitman,2006). Timing:Thecombinationofthecashflowanditstimingfullydefinesthereturn
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