Equidam

APRIL 26, 2025

Comparable Transactions (as a Primary Method): This method, often referred to as “comps,” involves applying valuation multiples (e.g., Discount Rate (Cost of Equity): The rate used to discount future cash flows reflects the riskiness of the investment. Beta measures the volatility of the company relative to the market.

Discounted Cash Flow 59

Discounted Cash Flow Terminal Value Book Value Beta 59

Valutico

OCTOBER 20, 2022

the asset-based approach also known as the cost-based approach, and finally 3. the multiple based or ‘ comps ’ (comparable company analysis) approach. d is the discount rate (which is usually the weighted average cost of capital (WACC), r in our previous example). Ce = Cost of Equity. The first is 1.

Discounted Cash Flow 52

Discounted Cash Flow Terminal Value Weighted Average Cost of Capital Net Present Value 52

Equidam

APRIL 22, 2025

Discount Rates / Risk Premiums: The discount rate used in DCF analysis (often the WACC) incorporates elements sensitive to market conditions. [21] 21] [22] [24] [27] The cost of equity component includes the market risk premium the excess return investors expect for investing in the broader market over a risk-free rate.

Discounted Cash Flow 52

Discounted Cash Flow Marketability Risk Premium Start-ups 52