Valuation

Why don’t we use Monte Carlo Simulation for Valuation?

  • This topic has 3 replies, 4 voices, and was last updated 6 months ago by Anonymous.
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  • #51667
    Biswajeet Pattnaik
    Participant

    I remember during my time at SABIC M&A, where we used @RISK to develop Monte Carlo Simulation on Valuation model and the output used to give sufficient data, return metrics distribution and confidence in extreme scenarios for decision making during FID. Don’t you think it is right time now, when we have already witnessed black swan events, to embrace Monte Carlo Simulation?

    #52874
    Brian Brown
    Participant

    I think it is a good idea if we have enough data and information. Otherwise scenario (stress) testing is a less sophisticated but useful method.

    #89416

    I use @RISK as an add-on to my valuation work and its MC simulation tool is really useful and relevant for certain industries such as pharma-life science.

    #94931
    Anonymous
    Inactive

    I think Monte Carlo Simulation for Valuation this is not suitable for everyone. this is the mean reason cant be used. if you are more know about for this you can go on Wikipedia and read abot monte carlo.

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