Private Equity Valuation: Academia vs. Reality

Sean Mooney, Doug McCormick, and Lloyd Metz dissect the gap between textbook valuation methods and what actually happens when private equity firms decide what to pay for a business. They compare DCF models to LBO models, debate the usefulness of terminal value assumptions, and explain why market-based approaches trump theoretical frameworks. The conversation reveals how deal psychology, credit availability, and real-world capital structures shape valuation decisions far more than any spreadsh...