Valuation

The IPO disruptor: the revolution of special purpose acquisition companies (SPACs) Special purpose acquisition companies (SPACs) may seem like a recent phenomenon, but they have been around for a long time. Infect “Blank check” companies became very popular in the 1980s before changes in rules & regulations ceased their operation.…

The choice of valuation multiples for private companies – which is the best The market approach is one of the widely used valuation techniques for private company valuation. Here the subject private company is benchmarked against a set of public comparables (public comps) or comparable transactions (Transaction comps). Valuation multiples…

Valuation multiples size adjustment and their relationship with the cost of capital The Guideline public company method (GPC) under the market approach of securities valuation uses value multiples of similar publicly traded companies to determine the valuation for the subject entity. These similar public companies are usually much larger than…

Private company valuation, how it differs from the valuation of publicly traded companies Pre-revenue start-ups are those that have still not started generating revenues; they are in the ideation stage, developing, or have just launched their minimum viable product. Valuing such businesses can be a very complicated and subjective exercise.…

Private company valuation, how it differs from the valuation of publicly traded companies Valuation is the process of estimating the true worth of a company; a valuation is required for various purposes by various stakeholders. Investors or potential acquirers require valuations for better-informed investing decision-making; suppliers need valuations to know…

The case for capitalization of earnings method in business valuations Capitalization of earnings is a method of company valuations under the Income approach. Unlike a more widely used Discounted cash flow analysis (DCF) method, which forecasts cashflows/Earnings over multiple future periods before a terminal value is determined, the Capitalization of…

Valuation of private businesses using public comps-does it makes sense? Comparable company analysis (CCA) is one of the most prominent business valuation methods. It falls under the Market approach. CCA relies on how other similar public companies (public comps) are priced in the market to derive a valuation for the…

Weighted Average Cost of Capital (WACC) and Its application in finance Every opportunity comes with a danger, and this fact of life is what we call “Risk” in finance. So, as investors, before putting money into any project, we need to ask how much danger we are exposing ourselves to…