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Why use LEAPS? |
- LEAPS can prove a significant DLOM
- company size and company risk have clear and major affects on discounts
- profit margin, earnings growth and dividends have minor affects on discounts
- companies with revenues of under $1 billion frequently require discounts of from 17% to 27% and more
- companies with beta's of 1.5 or more frequently require discounts of from 16% to 23%
- LEAPS are valuation date specific
- research proves that discounts change over time and are not constant in size.
- LEAPS capture industry differences in discounts
- research proves that discounts vary by industry
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