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What is valuation?

Valuation is the process of determining the economic value of a business or an asset. It's the price that a buyer is willing to pay to acquire a business or an asset.

There are many ways to determine a company's valuation, including looking at its assets, earnings, market value of comparable companies, and future cash flows. Different valuation methods may be appropriate in different circumstances and may yield different results. Valuation is often an important consideration in activities like fundraising, mergers and acquisitions, and financial reporting. It's worth noting that valuation is more of an art than a science, with the true value of a company being ultimately determined by what someone is willing to pay for it.

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