Appraiser Uses Direct Way to Estimate Private-Company Cost of Equity

Business Valuation UpdateVol. 28 No. 3
March 2022
cost of capital
cost of capital, pepperdine private capital markets study, industry analysis, valuation report


One appraiser, after 25 years and over 1,000 valuations of small owner-operated businesses, says that these firms bear no relation to public companies, so why look to the public markets for data when estimating cost of capital? Here’s the method he uses, which looks directly at the private capital markets and does not require any expensive resources.