What are some common mistakes in business valuation?
Some common mistakes include overestimating future cash flows, ignoring market conditions, and not considering comparable sales.
Can you explain why overestimating cash flows is a mistake?
Overestimating cash flows can lead to inflated valuations, making a business appear more valuable than it truly is, which can mislead investors.
What about ignoring market conditions?
Ignoring market conditions can result in a valuation that doesn't reflect current economic realities, leading to poor investment decisions.
How can I avoid these mistakes?
To avoid these mistakes, conduct thorough market research, use conservative estimates, and consult with valuation experts.
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