Questions You Need To Ask About Property Valuation

liquids you’re not necessarily going to apply it there you could still do it if the companies that were acquired in these deals are really not comparable to your own at all you’re generally not going to apply this same type of discount to businessperson because they are so much larger and are probably more similar to the president transactions you will probably still apply some type of small discount.

For the comparable public companies but again it’s just going to be a lot lower than it is here you might see five percent ten percent fifteen percent depending on the type businessperson president transactions not too much is different but you might use some more creative metrics especially if you’re looking at a tech startup for example here’s our list of comparable for karaoke and as you can see we’re looking at monthly active users and also enterprise value to monthly active users now cacao and actually.

most of these companies were generating some amount of revenue but the reason we’re looking at this is because for social media and gaming and mobile companies monthly active users is a very important metric and it’s useful to look at a slightly different valuation method with that said let’s now move into part and look at some of the problems with the discounted cash flow analysis the problems that emerge and some of the differences here so the first problem is that discount rate now the discount rate should be higher for a private company because you’re taking on more risk it’s harder to sell your shares if you can even somehow acquire shares in the power company if there’s more risk their returns need to be higher and so the discount rate needs to be higher as well of course it’s.

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