- CFA Exams
- 2025 Level II
- Topic 5. Equity Valuation
- Learning Module 25. Private Company Valuation
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Learning Outcome Statements PDF Download
| 1. Private and Public Company Valuation: Similarities and Contrasts compare public and private company valuation; | |
| 2. Reasons for Performing Valuations describe uses of private business valuation and explain applications of greatest concern to financial analysts; | |
| 3. Definitions (Standards) of Value describe uses of private business valuation and explain applications of greatest concern to financial analysts; | |
| 4. Valuation Approaches, Earnings Normalization and Cash Flow Estimation Issues explain the income, market, and asset-based approaches to private company valuation and factors relevant to the selection of each approach; explain cash flow estimation issues related to private companies and adjustments required to estimate normalized earnings; | |
| 5. Income Approach Methods of Private Company Valuation calculate the value of a private company using free cash flow, capitalized cash flow, and/or excess earnings methods; explain factors that require adjustment when estimating the discount rate for private companies; compare models used to estimate the required rate of return to private company equity (for example, the CAPM, the expanded CAPM, and the build-up approach); | |
| 6. Market Approach Methods of Private Company Valuation calculate the value of a private company based on market approach methods and describe advantages and disadvantages of each method; | |
| 7. Asset-Based Approach to Private Company Valuation describe the asset-based approach to private company valuation; | |
| 8. Valuation Discounts and Premiums explain and evaluate the effects on private company valuations of discounts and premiums based on control and marketability; |
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