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Unformatted text preview: quisition. VALUATION VALUATION y LISTED STOCK VS. NASDAQ : There is a sizable body of discussion as to whether it is better to be listed on an exchange, and be the captive of a spet or to be on NASDAQ. In the NASDAQ market you need at least one “Market Maker”, an investment banker who will make a market in your stock. Stocks with a lot of interest have dozens of “Market Makers.” – If you are listed with an under capitalized Spet, your stock may really suffer in times of heavy selling. The job of the Spet is to make an “orderly” market. VALUATION VALUATION y y DEBT/ EQUITY RATIO: As important as this is in the internal management of the firm, it will probably not affect the multiplier of a publicly owned firm unless it is at one extreme ­ too much debt or a “Clean balance sheet” ­ meaning no long term debt. DIVIDENDS: Most publicly held developing firms do not pay (any significant) dividends; if they did, people would think that they have “leveled off” and are not growing any more. This could be disastrous for their stock price. VALUATION VALUATION y CORPORATE IMAGE: A function of many subjective things: – COMPANY NAME ­...
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