List out the various approaches in practice to find out value of shares of each entity post demerger.

In a demerger, a company splits into two different entities. So the valuation of each entity is estimated on a standalone basis and the relative value as a ratio is arrived at. The following are the approaches in practice to find out value of shares of each entity post de-merger: Asset based approach (a) Net asset value Income based approach (a) Discounted cash flow method (b) Earnings capitalisation (c) Excess earnings method (d) Incremental cash flows method Market based approach (a) Market price (b) Comparable transaction multiple