Business Valuation Update
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The Implied Private Company Pricing Model (IPCPM) Ko = (FCFF1 / P) + g
Editor’s Note: The authors have developed a model designed to be more reliable than the build-up method for estimating the cost of capital of a small privately held business. This model uses the authors’ new Implied Private Company Pricing Line 2.0 (IPCPL ...
Debate Rekindles Over Private Company Cost of Capital Model
A recent issue of The Value Examiner devotes a good deal of space to the implied private company pricing line (IPCPL), a model designed to better estimate the cost of capital for small private companies (those with revenues below $150 million). The model ...
BVU Profile: The Challenges of Bringing a New BV Methodology Into Acceptance
Peter J. Butler, CFA, ASA, founding principal of Valtrend (Eagle, Idaho), has championed a more quantitative and empirical approach to developing the cost of capital. This approach is embodied in the Total Cost of Equity Calculator, also known as the Butl ...
Looking to Private Markets for Private Firm Cost of Capital
Some valuation experts are not comfortable with the theory that public-company data can be substituted for private value. They see some financial theory risks to the standard valuation process of applying a myriad of judgments and assumptions to convert m ...
BV Community Reacts to New Cost of Capital Tool
Feedback was swift from the valuation community on the implied private company pricing line (IPCPL), a new method to estimate the cost of capital for private companies. An article explaining IPCPL was published in the September 2013 issue of Business Valu ...
IPCPL Developers Field Queries on the New Model’s Underlying Data
In the September 2013 issue of Business Valuation Update, we presented a new method designed to be more reliable in estimating the cost of capital for a privately held business with revenues less than $10 million. The method, known as the implied private ...