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A complementary valuation model and exit multiples

Author

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  • Kang, Hyoung-Goo
  • Ryu, Doojin

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.

Suggested Citation

  • Kang, Hyoung-Goo & Ryu, Doojin, 2025. "A complementary valuation model and exit multiples," Finance Research Letters, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325004453
    DOI: 10.1016/j.frl.2025.107182
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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