there is definitely a flaw in saying a company will never die (well, maybe not with BO in charge) and GGM and spin-offs used in DDM, DCF and related models.
would it be more appropriate creating a formula that incorporates the average life of a company of that size? such that moving from one cap to another would have an impact on valuation in that way? i think its impossible to use anything but relative valuation methods for smaller companies but relative valuations still need to reflect earnings valuations in the long-run. at what point will we have enough history to draw reasonable estimates of company life expectancies?
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