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How to Value an SME—An Introductory Guide

Valutico

SMEs can present challenges with DCF due to limited historical financial data, unreliable information, inadequate financial forecasts, and difficulty in determining terminal value. However, market information required for CAPM, such as beta coefficients and risk premiums, may not be available for SMEs.

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How to value SMEs: A Simplified Roadmap

Valutico

However, market information required for CAPM, such as beta coefficients and risk premiums, may not be available for SMEs. Lastly, determining the continuity value (or terminal value) is a subjective process that often leads to disagreements. Valuing an SME isn’t about choosing one method over another.