The Economics of Business Valuation: Towards a Value Functional Approach
Patrick Anderson
Abstract
For decades, the traditional approaches to business valuation (market, asset, and income) have taken center stage in the assessment of the firm. This book presents an expanded valuation toolkit, consisting of nine well-defined valuation principles hailing from the fields of economics, finance, accounting, taxation, and management. It ultimately argues that the “value functional” approach to business valuation avoids most of the shortcomings of its competitors, and more correctly matches the actual motivations and information held by stakeholders. To remedy the shortcomings of existing theory, ... More
For decades, the traditional approaches to business valuation (market, asset, and income) have taken center stage in the assessment of the firm. This book presents an expanded valuation toolkit, consisting of nine well-defined valuation principles hailing from the fields of economics, finance, accounting, taxation, and management. It ultimately argues that the “value functional” approach to business valuation avoids most of the shortcomings of its competitors, and more correctly matches the actual motivations and information held by stakeholders. To remedy the shortcomings of existing theory, the author proposes a new definition of the firm that is consistent with the principle that entrepreneurs maximize value, not profit.
Keywords:
value,
firm,
business value,
Economics,
Finance,
net present value rule,
recursive model,
value functional equation,
basic pricing equation,
stochastic discount factor
Bibliographic Information
| Print publication date: 2013 |
Print ISBN-13: 9780804758307 |
| Published to Stanford Scholarship Online: September 2013 |
DOI:10.11126/stanford/9780804758307.001.0001 |
