Brian DeChesare

MAY 3, 2023

The DDM is more grounded because it’s based on the company’s actual distributions and potential future value. And it values the company today based on the present value of its dividends and that potential future value (either the stock price or the Equity Value via the Terminal Value calculation).

Dividends 64

Dividends Terminal Value Enterprise Value Equity 64

Chris Mercer

MARCH 7, 2024

The determination of the present value of expected future cash flows is inherently a quantitative exercise. The final cash flow for minority interests is the expectation of a terminal value at the end of the expected holding period. Appraisers sometimes think that it is not possible to estimate holding period premiums.

Dividends 52

Dividends Appraisal Terminal Value Business Valuation 52

Valutico

SEPTEMBER 13, 2023

SMEs can present challenges with DCF due to limited historical financial data, unreliable information, inadequate financial forecasts, and difficulty in determining terminal value. Approximations, negotiations, and considering illiquidity premiums help mitigate these challenges.

Discounted Cash Flow 52

Discounted Cash Flow Comparable Company Analysis Asset-based Approach Intangible Assets 52

Valutico

AUGUST 10, 2023

However, market information required for CAPM, such as beta coefficients and risk premiums, may not be available for SMEs. To solve this, approximations are used, and an illiquidity premium is added to the rate to account for the lack of market for SME shares.

Discounted Cash Flow 52

Discounted Cash Flow Asset-based Approach Intangible Assets Business Valuation 52

Valutico

OCTOBER 20, 2022

Well, the short answer is after that forecast period where we estimate each year’s cash flows then discount them, we add a single number at the end to account for all the theoretical years in the future, called the Terminal Value (TV). Explaining The Terminal Value. How do I calculate the Terminal Value?”

Discounted Cash Flow 52

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

Musings on Markets

FEBRUARY 2, 2023

Finally, my starting cost of capital of 10.15% reflects the reality that the riskfree rate and equity risk premiums have risen over 2022, and my ending number of 9% is an indication that I expect Tesla to become less risky over time.

Start-ups 99

Start-ups Risk-free Rate Market Capitalization Marketability 99