Take a look at a typical business valuation and you will see a discussion of discount and capitalization rates. These are often confused with each other, usually because capitalization is a special form of discounting in valuation. Capitalization of business earnings is very common. Basically, you use the expected economic benefit for a single time… Continue Reading
Risk and return go hand in hand when it comes to valuing a business. Every company must be able to attract and retain the needed capital in order to continue. The cost of capital is thus an important input in your business valuation. Beta and systematic business risk There is a notion of systematic risk,… Continue Reading
