We're in the process of a negotiation and seller insists his current shareholding of NTA + DCF to be the consideration. Is this acceptable?? What is its basis??
2007-01-17 11:33:28 · 2 answers · asked by smarfette 1 in Business & Finance ➔ Investing
Not sure what NTA is, but Discounted Cash flow (DCF) analysis is the theoretical correct way to value any investment. It involves projecting cash flows for each year of the productive life of the asset and discounting the cash flows to the present value at a relevant discount rate.
2007-01-17 12:02:18 · answer #1 · answered by nickfromct 3 · 0⤊ 0⤋
I believe NTA is Non Transferable Asset or real estate. Usually DCF is the widely accepted and truthful model, unless ofcourse it is somwhere in downtown Tokyo or so where the real estate prices are very high per square foot. In such cases too the rental income will substantiate DCF model.
If it has to do with intangiable assets like brand name etc; also this is valuable only outside USA and is not an equitable method to calculate the value of a Company.
2007-01-19 12:46:43 · answer #2 · answered by Mathew C 5 · 0⤊ 0⤋