comparability" (Bielinski 65). Third, how do the current stock prices of each comparable firm compare to their historic prices? Do "the current specific multiples and general market multiples fall near the high or low end of their historical ranges, and do they continue or reverse a trend" (Bielinski 65)?
The Capital Asset Pricing Model (CAPM) frequently is used the assess the equity value of a corporation issuing an IPO for purposes of pricing the IPO (Zent 32). Sharpe (143) said that securities "prices are the result of different analyses of somewhat different sets of information, along with different conditions and preferences relevant for various investors. One analyst's estimates of risk and return for a security are likely to differ from those of other analysts. Since both risk and return are subjective estimates dealing with the future, there is ample room for disagreement a. These differences make a it impossible to categorically measure risk and return and the relationship between them." The CAPM was developed as
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