(1) KFS is also interested in applying value-based management to its own divisions. Explain what value based management is.
(2) What are the four value drivers? How does each of them affect value?
You have been hired as a consultant to Kulpa Fishing Supplies (KFS), a company that is seeking to increase its value. The company’s CEO and founder, Mia Kulpa, has asked you to estimate the value of two privately held companies that KFS is considering acquiring. But first, the senior management of KFS would like for you to explain how to value companies that don’t pay any dividends.