Damodaran on Valuation_ Security Analysis for Investment and Corporate Finance ( PDFDrive )

capital is difficult

Makes forecasting

returns more difficult

Cost of
capital

Multiple businesses

Operationsinemerging

markets

No market-traded debt

No bond rating

Off-balance-sheet debt

As business mix

changes, beta will

change

Different risk

premiumsfordifferent

markets

Market value of debt

has to be estimated

Estimating default

spread becomes

difficult

Debt ratio difficult to

estimate

Cross
holdings

Holdings in publicly

traded firms

Holdings in private

companies

Holdings in other

entities

Requires that these

companies be valued

Impossible to get

informationonprivate

company holdings

Used to hide assets,

debt, and other

unpleasant facts

Employee
options

Options grantedin the

past

Continuing option

grants

Insufficient

information to value

options

Difficult to estimate

expected earnings in

future periods