Results accuracy analysis of applying the Black Scholes formula to the non-public companies equity value valuation

This article examines the accuracy of the Black-Scholes formula in relation to the valuation of the equity value of non-public companies. To do this, we defined the key parameters of the formula, performed calculations, and calculated the accuracy. The data was calculated only for those indicators that are available for non-public companies, but the sample included public companies. Accordingly, the capitalization of public companies was used as the true values of the cost of equity. In the end, the model showed a fairly large standard deviation of errors, but the capitalization of undervalued companies in this model is growing, which is confirmed by significant correlation coefficients.