Learn Valuation Techniques - PWERM (PROBABILITY WEIGHTED EXPECTED RETURN METHOD)

Probability-Weighted Expected Return Method (“PWERM”): The PWERM estimates common equity value based upon an analysis of various future outcomes,such as an IPO, merger or sale, dissolution, or continued operation as a private, viable ongoing enterprise. The allocated value is based upon the probability-weighted present values of expected future investment returns, considering each of the possible outcomes available to the enterprise, as well as the rights of each security class.