Smaller companies have much higher cost of capital than big companies; Pratt's Stats multiples strikingly different

Business Valuation UpdateVol. 8 No. 5
May 2002
Shannon P. Pratt, CFA, ARM, ABAR, FASA, MCBA, CM&AA

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cost of capital, pratt's stats (PS), earnings before interest, taxes, depreciation, amortization (EBITDA), valuation multiples

Summary

A new study on the Pratt's Stats™ database shows consistently lower valuation multiples for small companies than for "middle market" companies. The top company in the 10th size decile of Ibbotson ...