Valuation has been considered to be the most challenging part in the field of finance. However, its relative importance cannot be undermined as it is the building block of the vast field of financial management. The valuation processes are concerned with the determination of the intrinsic or the actual value of an asset security in present day terms by discounting the potential returns and cash flows from the security which are expected to be received at different time periods in the future. Thus it can be ascertained that the process of valuation is a highly subjective one and can generate invariably large range of estimates of the intrinsic value of the security. This entire process is a forward looking process and hence caution has to be exercised while determining the values of the inputs applied in the valuation models as the errors in the entry of inputs translate into faulty valuation estimates. The validity of the valuation model is directly contingent to the accuracy of the inputs which have been used in the model. The underlying idea behind various valuation models is to identify the future cash flow and return generating capacity of the asset security (for example, stocks provide returns in the form of dividend payments and capital appreciation) and compute the present value in today’s terms so as to estimate its intrinsic value. A robust process of valuation is one that incorporates the concept of time value of money also in the process (Ross, Westerfield & Jaffe, 2010).