One can mitigate the risks associated with investment valuation by diversifying their investment portfolio, conducting thorough research and analysis of the investment, understanding the market trends, and regularly reviewing and adjusting the investment strategy. It's also important to consider the efficiency of capital use between companies based on assumptions of Return on Invested Capital (ROIC), reinvestment rate and valuation multiples. Sensitivity of returns to the core assumptions should also be taken into account.
Need help with which companies or projects to invest in? As a key driver of value in business, ROIC...
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