Finance / July 17, 2018 / Alicia Franklin
Equity is the value of the business left to its owners after the business has paid all liabilities. Sometimes, there are different classes of ownership units, such as common stock and preferred stock. Total equity is what is left over after you subtract the value of all the liabilities of a company from the value of all of its assets. Equity is reported on a company's balance sheet.
Economic cost which is also known as opportunity cost is the value you give up when you choose one economic activity over the next best economic activity. Such economic activities might include buying goods or services or staring a business. You can calculate the economic cost by finding the difference between the chosen economic activity and the alternative economic activity.
Discount refers to the condition of the price of a bond that is lower than the face value. The discount equals the difference between the price paid for and it’s par value. Discount is a kind of reduction or deduction in the cost price of a product. It is mostly used in consumer transactions, where people are provided with discounts on various products.
The methods under the market approach typically use a number of valuation multiples. These multiples are ratios that relate the business market value to some measure of the company’s economic performance.
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