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Since you do have money coming in and an expectation of what your growth will be, you can run a discounted cash flow model to get a price.
by steveplace 18y ago
Since you do have money coming in and an expectation of what your growth will be, you can run a discounted cash flow model to get a price.
- rshao 18y agoThis is as much for my knowledge as the original poster, but what discount rate would you use? He doesn't exactly have a beta to do Weighted Average Cost of Capital with, or am I totally missing something?
- incomethax 18y agoI've always estimated the discount rate based on the expectations for growth from the buyer. At the end of the day, the valuation on a site or business is simply whatever you can get for it. A site might be worth more to a buyer who sells a similar product whereas it might have less value to someone in another industry.
- steveplace 18y agoDunno. I'm pretty sure there's some magic numbers out there for certain industries. I think it's one of those variables you argue about during negotiations.