Business Valuation Update
- How to Review a Report’s Valuation Methodology
- Ideas for Solving Two Problems in the BV Profession
- How Do Your Firm’s Benefits Stack Up?
- Using Rule of Thumb Data to Uncover Cooked Books
Expanding the Cost of Capital Horizon Beyond CAPM
We will see many advances in estimating the cost of capital in future years, as it is still relatively unknown how risk is priced. That was one of the messages of two sessions on cost of capital at a recent valuation conference. In addition, insights were offered on such topics as normalising the risk-free rate, the ERP, the size premium, and liquidity.
What to Do About Applying Size Premia in Australia
The size premium is an important valuation issue for two reasons: (1) it is difficult to estimate; and (2) its inclusion in deriving a cost of capital can have a material effect on the outcome of a valuation assignment. This article provides an overview of the current status of the size effect and size premia in Australia, examples of cases from Australian courts and tribunals in which size premia have been considered, and the issues and challenges faced in estimating size premia within the Australian market.
Business Valuation Update now available online
We have recently achieved a goal that I regard as a significant milestone in making Business Valuation Update even more timely and useful for our subscribers: the ability to access our publication online. Needless to say, this new feature will be another tool to help efficiently obtain information, and, ultimately, perform better business valuations. Versatile search capabilities Now you can quickly find everything we have ever written about marketability discounts, family limited partnerships, ESOPs, goodwill ...
Al Rappaport estimates equity risk premium between 3 and 5 percent
Rappaport, Alfred, Creating Shareholder Value, Revised Edition, The Free Press, 1230 Avenue of the Americas, New York, NY 10020, (800) 223-2336, 205 pages, $34.50 postpaid. Just as I was finishing the manuscript of my new book, Cost of Capital-Theory, Measurement, and Applications (scheduled out in April), I received the 1998 Revised Edition of Dr. Al Rappaport’s well-known book, Creating Shareholder Value . I was so struck with what seems to me to be the common ...
ASA hosts record-breaking BV conference Many conference papers plus IRS manual added to BVU Online Part 1 or 2 parts
Over 500 business valuation professionals attended the American Society of Appraisers 16th Annual Advanced Business Valuation Conference held October 23-24, 1997, at the Palace Hotel in San Francisco.
Risk Free Rate Update
At the time I write this (the morning of Aug. 8, 2011), it appears that the initial reaction in worldwide equity markets to the turmoil in the euro zone and Standard & Poor’s downgrade over the weekend of the U.S. government’s credit rating has been to se ...
Build-up vs. CAPM Method
In the Income Approach Example on page 2 of the September BV Update , you show the calculation of a discount rate using the CAPM method. I have several questions about the calculation: 1.
Cost of capital data
I have just subscribed to the Shannon Pratts Business Valuation Update and I have a couple of questions about the information reported in the Cost of Capital section of your newsletter. M ...
IBA Conference
n The court appointed expert Darrell V. Arne, CBA, ASA, CPA, CBI Arne & Co. Albuquerque, NM Darrell emphasized that there is a demand for court-appointed experts, courts and litig ...
ASA and CICBV join forces for the 5th Joint Advanced BV Conference in Orlando
Part 1 of 2 Evolution and outlook for the north American securities market Mark E. Lackrit Securities Industry Association Washington, D.C. This presentation given by the pr ...
From experts in valuation in each of nine industry groups to a takeoff on Survivor, AICPA BV Conference offers variety
The 2001 AICPA Business Valuation Conference held at the Venetian in Las Vegas December 2-4 was attended by 840 people (by the way, the Venetian served the best conference food that I've ever experienced).
Panel challenges traditional levels of value chart at the 20th Advanced Business Valuation Conference
The 20th annual American Society of Appraisers (ASA) Advanced Business Valuation Conference was a huge success, despite attendance of only about 325 compared to pre-Sept. 11 projections of 450 attende ...
Valuation expert provides insight on Howell v. Howell - Court accepts value to owner versus fair market value
The April 1999 issue of Judges & Lawyers Business Valuation Update summarized the opinion of the trial court in Howell v. Howell , 1998 WL 972312 (Va Cir. Ct.). This is a notable e ...
Weinberg v. Commissioner: Good law, bad economics, or both?
Lawyers often comment that good cases make bad law. As an economist, I have a similar comment: good law often comes from bad economics. By definition, a judge’s opinion is good law.
Discounts may apply when company holds nonhomogeneous assets or a diverse portfolio
Shannon Pratt's latest book Business Valuation Discounts and Premiums thoroughly discusses the well-known minority and marketability discounts. However, it also covers less familiar discounts, such as ...
1999 Guide to Business Valuations has "fair value" chapter, much more
The new 1999 Guide to Business Valuations contains more new material than any edition in several years.
Ibbotson Associates launches new Cost of Capital Center at www.ibbotson.com
By Ronald L. Seigneur, MBA, CVA, CPA/ABV and Tara McDowell* The Ibbotson Associates (IA) Cost of Capital Center Web site, which is a widely recognized source of cost of capit ...
Was the DE Chancery Too Quick to Dismiss the Build-Up Method?
In response to BVU’s coverage of In re Orchard Enterprises, Ted Israel (Eckhoff Accountancy) finds much to compliment in the Chancery Court’s opinion, but also two major points to criticize regarding the court’s characterization of the build-up method (BU ...
COE Estimates From Leading Data Sets Are All ‘Very Close’
Jim Hitchner conducted a hypothetical engagement using Kroll’s Navigator, BVR’s Cost of Capital Professional, the Pepperdine study, and Damodaran’s data to estimate cost of equity (COE).
New Articles Ask Us to Rethink the Equity Risk Premium
A stream of articles and public commentary in the past couple of months has questioned the validity of the historical equity risk premium.
What’s New and Noteworthy in the DP 2016 Valuation Handbook
It has now been three years since Duff & Phelps (DP) took the baton from Morningstar/Ibbotson (MI) to continue the production of arguably the key resource for cost of capital determinations in business and intellectual property appraisal. The Duff & Phelp ...
Risky Business: A Generous Helping of Company-Specific Risk
A potential exists for valuation analysts to overestimate the company-specific risk premium when valuing small businesses. For purposes of this discussion, company-specific risk and unsystematic risk are used interchangeably. “Small business” is defined ...
Global BVU News and Trends October 2019
Business valuation news from a global perspective.
BVU News and Trends December 2019
A monthly roundup of key developments of interest to business valuation experts.
BVU News and Trends September 2020
A monthly roundup of key developments of interest to business valuation experts.