Valuation Report Excerpts Using Pepperdine to Estimate a Discount Rate.

This article discusses the use of the Pepperdine University Graziadio Business School's Private Capital Markets Report to estimate a discount rate for private companies. The report provides information on expected rates of return from providers in the private capital market. Valuation analysts often use this report as a corroborating method to estimate the cost of capital for privately held companies. The article includes examples of how the base rate for cost of equity is developed using the Pepperdine report and adjusted for company-specific factors. It emphasizes that the discount rate should be based on rates of return expected from private companies, rather than public securities market data. [Extracted from the article]