Remove DCF Remove Investors Remove Public Trading
article thumbnail

Post 3 - Why does the conventional DCF not work for valuing a start-up/young firm?

Wizenius

Diversity in equity claims: In most of the cases of publicly traded firms with one class of shares, all equity claims on the firm are equivalent.

DCF 52
article thumbnail

Post 4 - Why does the conventional DCF not work for valuing a start-up/young firm?

Wizenius

The discounting factor would be typically more compared to the one used in publicly traded firms. This discounting factor is targeted rate of return of the VC investor and is set high enough to capture the foreseen/perceived risk of operating the business and chances of its survival.

DCF 52
article thumbnail

Methods and Examples on How to Value a Company

Lake Country Advisors

Market Capitalization Market capitalization is one of the simplest and most commonly used methods for valuing a publicly traded company. Example Scenario: Suppose XYZ Corp is a publicly traded technology company with 50 million shares outstanding, and the current share price is $20.