A complementary valuation model and exit multiples

Hyoung-Goo Kang and Doojin Ryu

Finance Research Letters, 2025, vol. 79, issue C

Abstract: We propose a valuation integrating growth dynamics and exit multiples to resolve inconsistencies in traditional models that misalign present valuations with terminal values. Our approach ensures coherence between entry and exit values by combining intrinsic and relative methods, providing a consistent tool. Particularly for venture capital and private equity, our model clarifies the role of exit multiples in intrinsic valuations.

Keywords: Discounted cash flow; Exit multiples; Growth dynamics; Valuation (search for similar items in EconPapers)
JEL-codes: G12 G24 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325004453

DOI: 10.1016/j.frl.2025.107182

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