- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Valuation
- Learning Module 27. Private Company Valuation
- Subject 8. Valuation Discounts and Premiums
CFA Practice Question
A DLOM may not be appropriate if the private company:
B. has no prospect for a liquidity event.
C. has not paid dividends and will not do so in the near future.
A. is pursuing a strategic sale.
B. has no prospect for a liquidity event.
C. has not paid dividends and will not do so in the near future.
Correct Answer: A
The timing of a potential liquidity event is a key consideration for valuation discounts.
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