Size premium
An addition to the required return for being small: capital costs more for smaller businesses and access to funding is worse.
How to read the number
Explains why a small company on the same metrics is valued below a large one from the same industry.
When the metric lies
Its very existence is disputed: it is sensitive to the measurement period and to whether companies that disappeared are counted. Adding it mechanically is not defensible.
Also known as: small cap premium