Company-Specific Risk Is Not All That Specific

Business Valuation UpdateVol. 27 No. 5
May 2021
Peter J. Butler, CFA, ASA
valuation methods & approaches
cost of capital, discount rate, risk analysis, company specific risk


All firms face company-specific risks, many of which are somewhat similar across industries and companies. So is anything really company-specific? An alternative method eliminates the need to totally guess at the company-specific risk premium.