Equity residual method

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Equity residual method is a method used to value a target firm using cash flows that are residuals and belong solely to the acquiring firm’s shareholders.


Definitions

According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),

Equity residual method. A method used to value a target firm using cash flows that are residuals and belong solely to the acquiring firm’s shareholders.

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