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Old 09-27-2008, 09:25 PM
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Default determining beta values for private companies

I'm writing a business plan and would like to determine the beta values for similar companies. The problem is that almost all are private. Should I just use the beta values of the nearest public companies, or is there a way to estimate beta for private companies? Could I use their history of previous valuations and compare this to the market, for example?
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Old 10-29-2009, 09:02 PM
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Default Re: determining beta values for private companies

Quote:
Originally Posted by Waffles View Post
I'm writing a business plan and would like to determine the beta values for similar companies. The problem is that almost all are private. Should I just use the beta values of the nearest public companies, or is there a way to estimate beta for private companies? Could I use their history of previous valuations and compare this to the market, for example?
If you cannot find a similar company to yours, you should try to look for companies that are affected by the same external factors and changes in the economy.

For example, if you are a car manufacturer, and you cannot find a similar car producer, then maybe you could find a listed tire manufacturer in the same size as yours.

I am not sure the example was very good, but the reply to this question is, that look for company's that are affected by the same economy movements as your company.
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Old 10-30-2009, 01:40 AM
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Default Re: determining beta values for private companies

VALUING PRIVATE COMPANIES AND DIVISIONS
SSRN-The Private Company Discount by Atulya Sarin, John Koeplin, Alan Shapiro
and look at
Principles of private firm valuation by Stanley J. Feldman
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