Dear all.

I have a question on valuation of equity investments.

What is the best method to value an unquoted investment

Cheers

Shehzad  


Well for unquoted investment you could:

If there is substantial market and volume of such equity in the market then, you could value it using market price.

If there is not market, or if, say due to the legal implications (private co. for example), the equity cant have liquidity in the market due to restrictions in transferring such shares, net worth (intrinsic value) method can be used.

There are other options for valuations also like dividend discount model and others, but these are more suitable if the shares can be transferred, proper forecasting etc.

Also if the company is going to get liquidated. the equity shares could be value at net worth using replacement value.