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One way to measure progress on this issue is to look at the portion of the bookvalue of equity at US companies that comes from tangible assets, in the chart below: Looking across all US firms from 1980 to 2022, the portion of bookvalue of equity that comes tangible assets has dropped from more than 70% in 1998 to about 30% in 2022.
Adjusted Net BookValue Adjusted Net BookValue is the BookValue of a business that has been adjusted to reflect the current market value of the assets and liabilities of a company. In this case, an adjustment to the value of these assets is required to determine Adjusted Net BookValue.
Market-based methods like Comparable Companies Analysis and Precedent Transactions Analysis offer relative measures of value based on market data. Income-based methods such as Discounted Cash Flow analysis focus on future cash flows to determine value. to its market value.
It is 100% possible to use standard valuation multiples, such as P / E and TEV / EBITDA , to value power/utility companies, and you’ll see many examples in the Fairness Opinions below. As a result of these points, you often make CapEx and the Rate Base the key drivers and then “back into” revenue based on allowed price increases.
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