Critical Finance Review > Vol 9 > Issue 1-2

The Choice of Valuation Techniques in Practice: Education Versus Profession

Lilia Mukhlynina, University of Zurich, Switzerland, , Kjell G. Nyborg, University of Zurich, Swiss Finance Institute, and CEPR, Switzerland,
Suggested Citation
Lilia Mukhlynina and Kjell G. Nyborg (2020), "The Choice of Valuation Techniques in Practice: Education Versus Profession", Critical Finance Review: Vol. 9: No. 1-2, pp 201-265.

Publication Date: 11 Jun 2020
© 2020 Lilia Mukhlynina and Kjell G. Nyborg
ValuationSurveySociological hypothesisMultiplesDCF


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In this article:
1. Introduction 
2. The Survey 
3. Analysis: Preliminaries 
4. Multiples 
Summary: Education Versus Profession (Table 3) 
6. Multiperiod Models 
7. Valuation Purpose and Cluster Analysis 
8. Concluding Remarks 
Appendix A. Survey Questionnaire 
Survey on investment valuation practice and policy 
4 General questions on analysis approach 


We use a survey approach to learn about valuation professionals’ choices and implementations of valuation techniques in practice. Most use both multiples and discounted cash flow (DCF), but implement DCF in a way that almost turns it into a multiples exercise. Confusion reigns with respect to interest tax shields and the weighted average cost of capital (WACC). Higher educational levels do not reduce the confusion. The survey design allows us to control for a respondent’s professional subgroup (e.g., consulting), education, experience, and valuation-purpose characteristics. We find that profession matters more than education; different professions have different valuation cultures. Other factors are less important. The relative unimportance of education raises questions about the role, benefit, and optimal mode of higher level finance education.