he latest issue of Hardball With Hitchner includes the results of some recent polls that reveal what valuation practitioners are doing to reflect the impact of COVID-19 in valuations. Here is a sampling from two polls that asked the same questions months apart—one poll was taken Oct. 29, 2020, and the other on May 14, 2020—it’s interesting to see the changes in responses:
1. Which equity discount rate methods are you now using most for small businesses with COVID-19?
| May | October | |
| a) Buildup model | 66% | 58% |
| b) MCAPM | 7% | 6% |
| c) Both | 15% | 24% |
| d) Neither or other | 2% | 2% |
| e) Not applicable | 9% | 10% |
2. Have you increased your ERP and/or company-specific risk with COVID-19 known or knowable?
| May | October | |
| a) Both | 42% | 31% |
| b) Neither | 5% | 5% |
| c) ERP only | 11% | 5% |
| d) CSR only | 23% | 38% |
| e) Not applicable | 20% | 21% |
| May | October | |
| a) Beginning 2021 | 45% | 31% |
| b) Beginning 2022 | 41% | 49% |
| c) Beginning 2023 | 10% | 16% |
| d) Will not recover | 1% | 1% |
| e) Not applicable | 3% | 3% |
Hardball With Hitchner is a new monthly publication written by James Hitchner (Valuation Products and Services). For subscription information, click here.
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