In Practice Webcast 7b: Estimating Cost of Capital for a Privately Owned Business
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Күн бұрынThe models that we use to estimate cost of equity and capital in finance are built for publicly traded company, with diversified marginal investors and observable market values for equity and debt. With private businesses, owners/potential buyers tend not to be diversified and there are no observable market values for equity and debt. In this session, I talk about how to overcome those challenges:
Slides: www.stern.nyu.edu/~adamodar/pd...
Total Beta dataset: www.stern.nyu.edu/~adamodar/pc...
@DaquanMHall 2 жыл бұрын
I work primarily with small private companies so this was incredibly helpful
@anzori2002 6 жыл бұрын
Wow!! Respect (and gratitude) from me!!
@Siebe_Al_ 17 күн бұрын
3:48 Market betas are derived from a regression of the returns in the stock vs the returns of the market index 4:52 method of calculating the specific company risk: how to get the data for the average correlation of the stock's industry?
@briancrane7634 6 жыл бұрын
Thanks once again Professor! We all thank you for sharing your thoughts with us.
@joelwhite142 6 жыл бұрын
Professor, By dividing the unlevered average public beta by average market correlation, I understand that this adjusts for the non-diversifiable risk. In theory, does this account for lack of marketability/liquidity? The additional risk for not being publicly traded is reflected in the Beta, where it is multiplied by MRP, so this would make sense.
@KevinHoda 6 жыл бұрын
danke
@313colombia 6 жыл бұрын
Genius
@agape2500 6 жыл бұрын
Good attempt but real life examples are few.
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