Posted: September 22nd, 2016

Discounted cash flow valuation and valuation using multiples of comparable firms are alternate approaches to valuation of a firm. Some favor DCF methods, labeling them as conceptually correct, yet, many business brokers and others in the financial community make widespread use of multiples.

Discounted cash flow valuation and valuation using multiples of comparable firms are alternate approaches to valuation of a firm. Some favor DCF methods, labeling them as conceptually correct, yet, many business brokers and others in the financial community make widespread use of multiples.

Given the characteristics of the two approaches, why do you think this discrepancy exists