Valuation practitioners commonly rely on the capital asset pricing model (CAPM) to estimate cost of equity. Under CAPM, risk is attributed to a single factor, "beta," which measures systematic risk, the only type of risk theoretically rewarded under CAPM...
Guest Article (2,523 words)
Business Valuation Update, February 2014
Many researchers have documented that the size effect has diminished since the 1980’s, says Mike Crain, speaking at the AICPA National Business Valuation Conference in DC. He offered the following academic studies on this point: • Eleswarapu and Rein...
Michael A. Crain
Guest Article (1,115 words)
Business Valuation Update, December 2010
It has been six years since Fama and French (F&F) published their seminal paper, " The Cross-section of Expected Stock Returns," The Journal of Finance , June, 1992, which examined the effect tha...
Editor's Column (904 words)
Business Valuation Update, May 1998
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...
Ronald L. Seigneur
Business Valuation Update, June 2016
Pablo Fernandez is a professor in the department of financial management at the University of Navarra—IESE Business School in Spain (ranked No. 5 in the world for full-time MBAs). A widely published author, he conducts a survey of market risk premiums and...
Guest Article (2,852 words)
Business Valuation Update, July 2015
This article is another installment in the long-running debate about whether small companies are riskier than large companies, all other things being equal.
John J. Kania
Guest Article (1,834 words)
Business Valuation Update, November 2003
Michael A. Crain, DBA, CPA/ABV, ASA, CFA, CFE, works primarily in the areas of business/ economic damage measurement, valuation of busi¬nesses and financial assets, and forensic accounting. He recently spoke with BVU about research he has been doing in t...
Guest Article (3,388 words)
Business Valuation Update, February 2015
In forced buyout, the appellate court affirms the trial court’s decision to adopt, with reservations, the discounted-cash-flow (DCF) valuation the seller’s expert proposed, but finds the oppressive conduct of the minority shareholder, the seller, justifie...
Court of Appeals New Jersey US, Action: Dissenting Shareholder
Legal and Court Case Update (2,132 words)
Business Valuation Update, July 2013
It is common during the valuation process for a valuation analyst to identify a shareholder loan recorded in the books of a business. In some circumstances, this loan—an amount owed by the company to the owner or by the owner to the company—becomes a sign...
Christine L. Baker
Guest Article (1,720 words)
Business Valuation Update, June 2013
In a recent paper written by one of the authors of this article and published in the American Business Review ("the Paper"), 1 Terrance Jalbert examines the comparative valuation of f...
William P. Dukes, Terrance Jalbert
Guest Article (1,999 words)
Business Valuation Update, March 2003
I'm relinquishing my Editor's Column space in this issue in favor of Gil Matthews' reaction to the U.S. Court of Appeals' reversal of the Tax Court decision in Simplot . - SP By Gilbert E. Matt...
Gilbert E. Matthews
Editor's Column (2,299 words)
Business Valuation Update, July 2001
In a fraudulent transfer case involving S corp, court says valuation should reflect that buyers of S corps would experience a reduction in the value of the corporations' earnings because of the need to pay personal income taxes on those earnings.
United States Bankruptcy Court Illinois US, Action: Bankruptcy
Legal and Court Case Update (2,236 words)
Business Valuation Update, March 2015