Relative Valuation
Overview
Relative valuation is a techinique that is designed to help overcome
the difficulties of producing an accurate valuation, particularly using the
discounted cash flow technique.
Relative valuation compares the asset in question to similar assets. It assumes that the market
efficiently
prices the set of similar (or comparable) assets.
It assumes the valuation should be close to those of the comparable assets, and may make a set of
adjustments based on the unique characteristics of the asset being valued.
Topics
