5min chapter

Think Big, Buy Small cover image

Listeners’ Questions, Rick and Royce's Answers

Think Big, Buy Small

CHAPTER

Understanding Valuation Challenges for Small Businesses

This chapter explores the challenges of valuing small businesses, highlighting the limitations of traditional discounted cash flow analyses in the context of capital market inefficiencies. The speakers advocate for the use of valuation multiples while discussing the critical role of cash flow models and interest rates in shaping business valuations.

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