Subject category:
Finance, Accounting and Control
Published by:
Darden Business Publishing
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Abstract
This case presents a challenging discounted-cash-flow (DCF) problem associated with the valuation consequences of changes made to an earnout agreement. The task of the student is to conduct a DCF analysis to compare the values of the original earnout and the amended earnout. The case is designed to be taught in an introductory course as an application of DCF principles, in particular, the choice of an appropriate discount rate consistent with risk.
About
Abstract
This case presents a challenging discounted-cash-flow (DCF) problem associated with the valuation consequences of changes made to an earnout agreement. The task of the student is to conduct a DCF analysis to compare the values of the original earnout and the amended earnout. The case is designed to be taught in an introductory course as an application of DCF principles, in particular, the choice of an appropriate discount rate consistent with risk.