Question: 1 . Why is it often more difficult to value privately owned companies than publicly traded firms? Give specific examples. 2 . Why is it

1. Why is it often more difficult to value privately owned companies than publicly traded firms? Give specific examples.
2. Why is it important to restate financial statements provided to the acquirer by the target firm? Be specific.
3. How could an analyst determine if the target firms cost and revenues are understated or overstated? Give specific examples.
4. What is a marketability risk premium? Why is it important to adjust projected cash flows for this risk?
5. How might the size of a firm affect its level of risk? Be specific.
6. Does beta in the capital asset pricing model have meaning for a firm that is not publicly traded? Explain your answer.

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