Because of data limitations, valuation of private firms often requires more subjective adjustments than for
public firms.

Question

Quizplus · Accepted Answer

Private firms often do not have publicly available financial information, making it harder to compare them to other firms and determine their true value. This requires the use of more subjective adjustments and assumptions, such as estimating the value of their intangible assets, projecting future earnings, and considering the company's management and industry factors. In contrast, public firms typically have better access to financial data and market information, allowing for more objective valuation methods.

Because of Data Limitations, Valuation of Private Firms Often Requires