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In the assessment, the impact of size needs to be analysed

In the assessment, the impact of size needs to be analysed

By Thomas Hachette, partner at Sorgem Evaluation, published in Option Finance, 15 November 2017

The impact of company size on their valuation has been the subject of numerous academic studies. When analysing a company using the discounted cash flow method, a size premium is often applied: this premium on the discount rate is equivalent to a discount on the enterprise value.

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