Hi,
I know that the excess earnings method requires us to divide something by a cap rate for intangible assets- but I feel like I’ve come across multiple applications of this concept and am thoroughly confused. Let’s say we are given information about a firms’ profitability (cash flows or earning or whatever we need)- what is a simple application of calculating excess earnings? Isn’t it only used for privates- why is that? And lastly does it get us the value of an entire firm or JUST the value of intangible assets or good will?
Thanks,