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Fundamentals of Functional Business Valuation

Author

Listed:
  • Matschke Manfred Jürgen

    (Ernst-Moritz-Arndt-Universität)

  • Brösel Gerrit

    (Technische Universität Ilmenau)

  • Matschke Xenia

    (Universität Trier)

Abstract

After a brief overview of different company valuation theories, this paper presents the main functions (decision, arbitration, and argument or negotiation function) of company valuation according to the functional (i.e., purpose-oriented) theory. The main body of the paper focuses on the decision function and shows how the decision value can be derived as a subjective limit value that different economic agents assign to the company. Finally, the differences between the functional and the market value oriented theory of company valuation are discussed.

Suggested Citation

  • Matschke Manfred Jürgen & Brösel Gerrit & Matschke Xenia, 2010. "Fundamentals of Functional Business Valuation," Journal of Business Valuation and Economic Loss Analysis, De Gruyter, vol. 5(1), pages 1-41, November.
  • Handle: RePEc:bpj:jbvela:v:5:y:2010:i:1:n:7
    as

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    References listed on IDEAS

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    1. Jevons, William Stanley, 1866. "Brief Account of a General Mathematical Theory of Political Economy," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 29, pages 282-287.
    2. J. Hirshleifer, 1958. "On the Theory of Optimal Investment Decision," Journal of Political Economy, University of Chicago Press, vol. 66, pages 329-329.
    3. K. J. Arrow, 1964. "The Role of Securities in the Optimal Allocation of Risk-bearing," Review of Economic Studies, Oxford University Press, vol. 31(2), pages 91-96.
    4. Jevons, William Stanley, 1871. "The Theory of Political Economy," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number jevons1871.
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    Cited by:

    1. Matschke, Xenia, 2008. "Funktionale Unternehmensbewertung im Lichte der Vertragstheorie," Wirtschaftswissenschaftliche Diskussionspapiere 04/2008, University of Greifswald, Faculty of Law and Economics.
    2. Polina K. Kirilova, 2015. "Assessing the Creditworthiness of Patchwork Portfolio Entrepreneurs in Emerging Markets: an Investment Theory-Based Approach," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 53-65, March.
    3. Heinz Klingelhöfer & Peter Kurz, 2011. "Financial valuation of investments in future power generation technologies: nuclear fusion and CCS in an emissions trading system," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 19(4), pages 415-438, December.
    4. repec:aes:amfeco:v:46:y:2017:i:19:p:836 is not listed on IDEAS

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