Hi everyone,
With regards to the cost of equity for a firm who got delisted a couple years back, what would be some key considerations?
I understand there'd be historical info available from its prior listing, but my main concern would be that its outdated - how would you overcome this?
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What you are going to need to do is to use comparable companies data. Generally use the average beta, unlever the beta and then relever the beta at your subject companies capital structure.
Echo capuchin monke. Average the comp betas, unlever, and then relever with your cap structure. You can get Rf and the risk premium online.
understand the part about using comps, perhaps should be clearer about it:
will there be any illiquidity adjustments you'd make to the discount rate seeing that its private now? if so, specifically how? seems a little arbitrary to me with regards to what I read from Damodaran.
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