All the underlying characteristics and assumptions used by popular financial theories and models do not hold up for start-ups,and even up to an IPO.

Question

Quizplus · Accepted Answer

Start-ups and companies going through an IPO operate in a highly unpredictable and dynamic environment, with a lack of historical financial data and a high possibility of failure. Therefore, the assumptions and characteristics used by popular financial theories and models, such as the efficient market hypothesis or CAPM, do not always apply to start-ups.

All the Underlying Characteristics and Assumptions Used by Popular Financial