A lot of DCF videos or learning I have seen is focused on public markets.
When calculating the cost of equity for a private business, how would you calculate/what is the substitute to Beta?
| +445 | Don’t work at UBS - UBS Sucks | 42 | 9h |
| +330 | Article - UBS’ Investment Bank Keeps Losing Ground | 43 | 9h |
| +214 | Should My Intern Get a Return Offer? | 59 | 7h |
| +57 | Getting Laid in IB? | 28 | 12h |
| +56 | F*ck it I'm Going to Med School | 19 | 2d |
| +45 | Living in greenwich as an analyst? | 9 | 13h |
| +32 | STEM student lost in London IB recruiting | 19 | 19h |
| +32 | Intern keeps sleeping at work - what to tell them | 18 | 22m |
| +27 | Nauseous every morning for past 3 years in IB, anyone else? | 20 | 42m |
| +27 | NYC Associate Budget | 9 | 1d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
You use the bottom up approach looking at comparable companies to estimate a private company's cost of equity. Find peer set, unlevered beta, and relevered back up to your companies capital structure, from there you can add some adjustments including, a size premium, and company risk.
Architecto animi nemo beatae. Repellat et eius laboriosam dolores.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...