What do you use for discount rate when a company’s isn’t known?

What do you use for a discount rate when the company's discount rate isn't published and the financials to figure it out aren't either?

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Comments (5)

Jul 28, 2021 - 7:19pm

Is this a private company?

Simplest way would be to look at equity research reports for listed companies that operates in the same industry and is as similar to it as possible (end clients, products, size - though probably less likely), and see what discount rate they use in the valuation section. It is sometimes given.  

Financing structure will impact this, and a premium may need to be added (which will increase the discount rate for your company).

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Aug 2, 2021 - 6:45pm

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