Can you use private companies as part of your valuation?

How to answer

Only in the context of precedent transactions – it would make no sense to include them for public company comparables or as part of the Cost of Equity / WACC calculation in a DCF because they are not public and therefore have no values for market cap or Beta. These more advanced questions cover industry-specific valuation in more detail, as well as scenarios like IPO valuation, M&A premiums, and future share price analysis that are not likely to come up in entry-level interviews – but which could come up if you’re going for more advanced positions.