How Volatility Affects Valuation

A few weeks ago as part of the Blog’s mission to feature insight and analysis from across Ipreo’s different business units, we kicked off a series from our Private Capital Markets team focusing on the role volatility plays in the valuation of a private company.

In the initial post entitled “Introduction to Volatility,” Cody Rosson (CVA), a Senior Valuation Analyst with Ipreo Private Capital Markets, explained the role of volatility in the valuation process of a private company.

Today, in part two of the series, Cody is back with a deeper look at how volatility affects our valuation.

Excerpt:

Once you are comfortable with what volatility is and how it is calculated, it is important to understand how it affects the valuation. Understanding how volatility relates to the valuation will help you make reasonable selections for each specific company. There are a few rules of thumb to keep in mind when considering volatility. While these won’t always hold true, they do serve as a starting point and provide guidance when making determinations.

Read the full Special Report – How Volatility Affects Our Valuation