Business evaluator Jeremy Webster
while discussing the Yahoo!/Microsoft proposition,
reviewed points to be considered when pricing a business.
They are;
Expected Future Cash Flow,
Comparable Deals,
Comparable Stock Market Prices,
and
Intrinsics Unique To That Company Or Situation.
Expected future cash flow is the toughest.
Assumptions have to be made on
big inputs such as growth rates,
realized efficiency ratios, and synergies.
These assumptions come easier with experience.
So the closer to your existing business a buy is,
the higher your chances of evaluating it properly.