13. When you are valuing a company, the usual methodology is to forecast near-term cashflows based on available information and use the growing perpetuity formula beyond that for the 14. One reason that firms conduct share buybacks instead of paying dividends is because share repurchases may receive favorable treatment compared to payment of dividends. 15. In order to reduce the risk of overpaying for an acquisition, firms need to undertake prudent valuation by, for example, conducting as part of due diligence