CHAPTER 4
Bridging Expectations with Contingent Consideration and Related Tools
There is everything you know and there is everything that happens. When the two do not line up, you make a choice.
—Mitch Albom, For One More Day
INTRODUCTION
Valuation, at its core, is a subjective process. Setting a value on a company means making judgments about its future, which can never be known with perfect certainty. Financial forecasts inherently reflect the modeler’s expectations about the economy, the industry, and the company with all its moving parts: What will become of the company’s products and services and those who supply, make, and buy them? All of these predictions help move the buyer toward a final number.
In most cases, buyers and sellers have ...
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