Valuation of high-tech companies requires modification of standard approaches

Business Valuation Update
June 26, 2002
weighted average cost of capital (WACC), discounted cash flow (DCF), initial public offering (IPO), capital asset pricing model (CAPM), earnings before interest, taxes, depreciation, amortization (EBITDA), earnings before interest, taxes (EBIT), free cash flow, high-tech companies, market multiples

Summary

The valuation of early stage technology companies ("high-tech") is significantly more challenging than valuing more mature businesses in other industries. These companies are commonly characterized by ...