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illiquid Equity Valuation
Posted: November 29th, 2007, 9:04 am
by balajian
What are the various valuation methods for unlisted/illiquid equity ?
illiquid Equity Valuation
Posted: November 29th, 2007, 9:34 am
by amit7ul
checking out balance sheet would be one, that would ofcourse be hard to get. for non-conglomerates you can also do relative valuation based on business-model and market.
illiquid Equity Valuation
Posted: November 29th, 2007, 1:50 pm
by csa
You can value a liquid comparable security (which is the usual way the market approach to valuation is done) and then apply some sort of an illiquidity discount. Which comparable security/securities to use as well as how you measure the illiquidity discount is pretty subjective. Valuation books usually have a discussion of these things, as well as the academic literature. Empirical papers have also provided magnitudes of illiquidity discounts based on whatever sample and methodology they used.