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Valuation

Valuation

A valuation is an estimate of what a company or a shareholding is worth.

What is a valuation?

A valuation is an estimate of what a limited company or a shareholding is worth. It is often made ahead of a capital raising, an acquisition or a transfer of shares.

 

Common valuation methods

A valuation can be based on, for example, net asset value, comparable companies or future cash flows. The valuation sets the price per share in a new share issue and affects the company's cap table.

Learn more about cap tables
Henrik Kristensen, NVR
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Related terms

Market-based valuation

A market-based valuation means a company is valued by comparison with similar companies or transactions.

Net asset value

Net asset value is the value of a company's assets minus its liabilities.

Capital raising

Capital raising is when a company brings in new capital, for example through a new share issue.

Acquisition

An acquisition means a company or person buys shares or a whole company.