Your Property Valuation Is Not What It Could Be

percent preferred Property Valuations Adelaide stock and the average percent equity and then we assumed that they also apply to our company here so we don’t need their current capital structure we don’t need their current market cap we’re just taking the industry average for these for-profit education companies and going with whatnot at this point you could also theoretically apply some type of additional premium to the discount.

Rate and you could say that since it is private company it’s very small it’s worthy of another premium and a discount rate should be even higher than fourteen or fifteen percent we don’t think it’s entirely necessary here but some people will also make maladjustment for the second problematic part terminal value it may or may not make sense for a true small business and it sort of depends.

on just how our line it’s on a key person individuals or key customers you could just for this by heavily discounting the terminal value you can also skip terminal value entirely and project free cash flow far into furthermore of like what you do with a net asset value model for a natural resource company or you could just assume the terminal value equals the liquidation value in the future so the business shuts down it sells off its assets it used them to repay its liabilities and then whatever is left over is the company’s terminal value at that point in time there are advantages and disadvantages to each of those methods you can see them lined up side by side here in one of our examples but the basic.