Advanced Corporate Finance - 'Company Valuation is an art not a Essay

Advanced Corporate Finance - 'Company Valuation is an art not a Science.' - Essay Example Valuation of a company is very difficult and it takes a lot of efforts for the company to access the right price of the company. There is however never a right or wrong price for a company and the price of companies depends a lot on a number of different factors. The main aim of this essay is to understand and highlight the various aspects for valuing of a company. Also aims to evaluate and argue about the various aspects of the company. It is essential to note that any business person entering into a business should have a valid exit plan. An exit plan from the market is very essential for any business. This is mainly a consideration when a business requires leaving the markets either due to a loss or even when a business plans to dissolve. As a part of the exit plan, the most essential point to be noted that while entering into a business the business person should also consider one aspect i.e. what the business is worth. Business valuation is an industry by itself (Feechan, 2006). The valuation of business can be done by the company itself or even by professional companies that mainly deal with business valuations. The valuation of companies can be based on a number of different aspects, like the net assets, discounted cash flows, etc. These valuations however do not give the full view and story of the company (Bytestart, 2008). There are a number of different modes for companies to be valued. The correct use of the various available valuation formulae will give a better view of the company and will help also provide for the amounts that a buyer might be interested in paying for the company, however this is not necessarily the selling price as the company can only be sold at a price that the buyers will be willing to pay. It is in the case of both the parties, the sellers want to gain as much as possible and the buyers want to pay as little as possible. This however cannot be argued as both the parties are always justifiable in both the cases

External, Internal, and Construct Validity Essay

External, Internal, and Construct Validity - Essay Example Second, the research analyzes if it is logical to consider the relationship as casual and it is through assessment of internal validity that this specific issue is determined. Third, a research analyzes if it is reasonable to consider that the scores on measures represent their respective constructs and construct validation procedures seem to be most effective method to address this question. In social research, there are four main concerns that correspond to four types of validity. â€Å"In essence these four types of validity concern different sorts of relationships in the research enterprise. Construct validity refers to the relationships between theoretical constructs and their operations. Both conclusion and internal validity refer to the relationship between the operationalized treatment and operationalized outcome†¦ External validity concerns the relationship between the hypothesized constructs that were operationalized and other constructs of interest that were not.â₠¬  (Judd and Kenny, 1981, p 20). It is most essential to compare and contrast the characteristics of external, internal, and construct validity in order to identify the threats to external and construct validity and to comprehend how validity issues could impact a research. In a profound analysis of validity in relation to social research, it becomes palpable that external, internal, and construct validity are very essential in order to assess the true validity of every study and it is necessary to define them separately. Thus, construct validity may be defined as â€Å"the extent to which the theoretical constructs of treatment, outcome, population, and setting have been successfully opearionalized,† and external validity as â€Å"the extent to which the effects we observe among operationalized constructs can be generalized to theoretical constructs other than those specified in the original research hypothesis,† whereas internal validity is â€Å"the extent to which the detected effects