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Basic Question 1 of 6
What is the private company valuation approach that corresponds to the discounted cash flow models in public equities analysis?
B. The market approach.
C. The asset-based approach.
A. The income approach.
B. The market approach.
C. The asset-based approach.
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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
calculate the value of a private company using free cash flow, capitalized cash flow, and/or excess earnings methods;
explain factors that require adjustment when estimating the discount rate for private companies;
compare models used to estimate the required rate of return to private company equity (for example, the CAPM, the expanded CAPM, and the build-up approach);
CFA® 2026 Level II Curriculum, Volume 4, Module 25.