Abstract

Facebook Inc. is a paragon of an internet growth company. It is evaluated using a valuation approach based on the Schwartz/Moon (2001) model, as this model features significant advantages over traditional valuation models and more adequately captures the characteristics of growth companies. As of September 30, 2012, the fundamental share value determined is $26.53, exceeding the market price per share of $22.66 by 22.48%. The subsequent sensitivity analysis reveals high sensitivities of the result to certain input parameters, emphasizing the importance of their thorough estimation.

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