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The Difficult Question

Incos Pens
New answer on Jan 21, 2020
2 Answers
1.6 k Views
Muhammad Hamza asked on Jan 18, 2020

Hi all,
Could someone help me in identifying an approach to the question asked at the end of the case. The idea that I get is that the client needs to market this segment in such a way that buyers pay the highest price. How can this be done?
Thank you!

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Luca
Expert
Content Creator
replied on Jan 21, 2020
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached

Hello,

There are different methods to estimate the price of a company. One of the most common is the "Multiplier method" that is based on the profit of the company (the logical consequence is that you should try to increase profits, but it's not the only factor to take into consideration).

You can find information simply written here:
https://exitadviser.com/business-value.aspx?id=business-valuation-methods#by-profit

Best,
Luca

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Clara
Expert
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replied on Jan 21, 2020
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

If you don´t have any market capitalization data -which is, at the end, what gives you the value of the company in the martkets-, you can always estimate based on profit or EBITDA.

Hope it helps!

Cheers,

Clara

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Luca gave the best answer

Luca

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BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached
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