What are some methods for valuing stock price in private companies?
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hunter
Apprentice
Joined: 22 Apr 2006
Posts: 3
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 Posted: 04/20/08 - 07:09 Post subject: |
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| I am still not totally clear about the issue of a "just" or "fair" price for stocks. The case of private companies comes across to me as particulary difficult, the more so if one takes at face value your contention that the price the "market" is prepard to pay is the "fair" one. In the case of private companies there is no real market so speak of. Are there any methods for valuing the latters'stock? |
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pasquale
Apprentice
Joined: 11 Dec 2006
Posts: 4
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| Posted: 05/19/08 - 22:57 Post subject: |
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| Obviously, since we are talking about market economies, the market is a prime force in determining the value of company shares, even private ones albeit to a lesser extent. For private companies the chartered accountants will tell you about a few ways how to calculte such value but they inevitably include such "subjective elements" or intangibles such as goodwill, intellectual property, brand perception etc. So at the end of the day you're back to square one: that's what people (or you) are prepared to pay! |
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