Beta, Specific Risk and Terminal Value - Business Valuation Zone

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Beta

Specific Risk

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9 Startup Valuation Methods: 5 to Use, 4 to Avoid

Equidam

APRIL 26, 2025

Furthermore, any quantitative valuation method, particularly the Discounted Cash Flow (DCF) approach, is highly sensitive to the underlying assumptions about growth rates, discount rates, and terminal values. This incorporates the risk-free rate, a market risk premium specific to the company’s country, and Beta ($beta$).

Discounted Cash Flow

Discounted Cash Flow Terminal Value Book Value Beta

Startup Valuation: The Ultimate Guide

Equidam

APRIL 22, 2025

10] , [23] , [2] Discount Rate: The rate used to discount future cash flows is typically the cost of equity, calculated via the Capital Asset Pricing Model (CAPM): Cost of Equity = Risk-Free Rate + Beta * Market Risk Premium. [23] to 2.5% [23] , [2] ) to ensure mathematical validity. [2]

Discounted Cash Flow

Discounted Cash Flow Terminal Value Marketability EBITDA

9 Startup Valuation Methods: 5 to Use, 4 to Avoid

Startup Valuation: The Ultimate Guide

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