Financing Expansion

My company has enjoyed a good run of success, and is now considering purchasing a competitor in order to expand further. After twelve years of business, we have expanded, becoming profitable, and are now franchising as well. In order to adopt a nationwide strategy with an eye to going global, we are looking at options for expansion. Taking over a competitor is one of the main options. This paper will analyze the idea of taking over a competitor, especially with respect to how to finance such a transaction.

Different Valuation Methods

There are several valuation methods that can be used to analyze the competing company. These are adjusted book value, capitalized adjusted earnings, discounted future earnings, the cash flow method and the gross revenue multiplier (Collin.edu, 2013). Another technique is to base the valuation on the stock market valuation of a similar company. The company we are going...
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