Could a key person premium be justified in a valuation? Your explanation of the key person discount had me thinking of which companies this applies to, and the inverse came to mind with Google recently. Many activist investors have been calling for Pichai to be removed as CEO, and it appears if management were to let him go and bring in a fresh/younger/more innovative CEO it could breathe new life into the stock.
I would rather suggest you consider another example: Elon Musk :) I think there must be at least $50 billion every year, discounted to today plus the risk that he will demand even higher salary in future.
Thank you for sharing :)
Why FCFF change from year 6 to year 10 in the table with comulated costs of capital?
Hello,
Where does that number 31,047 in 14:04 come from?
= (3,696/2.1759) + (63,860/2.1759)
Could a key person premium be justified in a valuation? Your explanation of the key person discount had me thinking of which companies this applies to, and the inverse came to mind with Google recently. Many activist investors have been calling for Pichai to be removed as CEO, and it appears if management were to let him go and bring in a fresh/younger/more innovative CEO it could breathe new life into the stock.
I would rather suggest you consider another example: Elon Musk :)
I think there must be at least $50 billion every year, discounted to today plus the risk that he will demand even higher salary in future.