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Comparable Transactions (as a Primary Method): This method, often referred to as “comps,” involves applying valuation multiples (e.g., This incorporates the risk-free rate, a marketrisk premium specific to the company’s country, and Beta ($beta$).
By associating a business with the right industry, evaluators can apply industry-specific benchmarks, market trends, and valuation multiples, ensuring a more accurate assessment of the company’s worth. Industry-SpecificRisks and Opportunities Every industry comes with specificrisks and opportunities.
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 * MarketRisk Premium. [23] 23] Risk-Free Rate: Tied to government bond yields (e.g.,
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