the referenced component could not be found

When adding reference to a dll in a .net project , you may experience Following error:
"the referenced component could not be found"

To resolve this error you can do one of the following
1- Make sure that referenced DLL is build using the same .NET Framework version. Issue may arise if you try to add a reference of higher .NET framework version to a lower .Net framework version project. IF both are built on different .NET version and you have the source code of DLL, build the project in similar version by going into the project properties. and add the newly build DLL in your project.

2- Make sure that the path of referenced DLL is not changed.

3- If your error still persists, close your solution , open it again , delete the reference to DLL if already exists. Add the reference back . This should solve the problem.

In my case point 1 was the case, but after following the steps problem was not solved then I follow the point 3 and it solved my problem.