Just came across this term on a practice exam. Does anyone know what it means?? Thanks
ct323 Wrote: ------------------------------------------------------- > Just came across this term on a practice exam. > > Does anyone know what it means?? > > Thanks yeah, you use CAPM to get a disct rate for your private company. so you look at similar companies that are traded publicly. you take there betas, UNLEVER, then RELEVER them and you do a CAPM for your private company. Now armed with that beta, you can crank out some cash flows,discount them, and arrive at a price target for your company. they do this all the time in PE, i banking, and in VC alot hope that helps. It is all in Book 4