For a public buyer, we assume no illiquidity discount as he is diversified. However, when he goes to sell it to another private company in the future, that company would count illiquidity discount. How should one counter this argument when trying to sell to a public buyer.
Dear sir, I have some question to ask you about the cost of capital equation cost of capital=14.5 ( 100/114.33)+4.5( 14.33/114.33) = 13.25 I can't figure it out where is a 100 and 114.33 come from . Would you please tell me how to calculate this.? Thank you so much for your kind post. It help me a lot because its very useful . Regards, Prasit rattanapiseth
Great material A swath. A question though. Unlevered beta =1.18 correlation with market = 0.5 Total unleavened beta = 2.36 Leverett beta = 2.56 Cost of capital = 13.23% =debt to capital ratio cost of equity = 14.50% debt to equity ratio =14.33% Could some kindly explain how I apply these figures to a business for valuation? What figures from the business would you use?