The Biggest Business Valuation Myth
The traditional capital asset pricing model and buildup method have failed to adequately quantify the required rates of return for equity holders. This paper discusses how profoundly business appraisers, the courts, investors, auditors, and the general public have been misled into thinking that these methods are valid, and suggests a way forward.Abstract
Pepperdine Private Cost of Capital LineCategories: Bank = bank lenders, ABL = asset-based lenders, Mezz = mezzanine investors, PEG = private equity groups, VC = venture capital investors, Angel = Angel investors (i.e., start-up and seed money), Factor = investors in receivables portfolios. Used with permission
Contributor Notes
Eric W. Nath, ASA, is the principal owner of Eric Nath & Associates, LLC in San Francisco, California.