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Equity Valuation Methods: Types - Balance Sheet, DCF, Earnings Multiplier
Equity valuation methods can be broadly classified into balance sheet methods, discounted cash flow methods, and relative valuation methods. Balance sheet methods comprise of book value, liquidation value, and replacement value methods. Discounted cash flow methods include dividend discount models and free cash flow models. Lastly, relative valuation methods are a price to earnings ratios, price to book value ratios, price to sales ratios etc.