Preview of the September issue of Business Valuation Update

BVWireIssue #155-3
August 19, 2015

Here’s what you’ll see:

  • The Misuse of Bid Premium Data to Determine Minority Discounts (Andrew Strickland and Robert Dohmeyer). The concepts surrounding the use of bid premium data in valuing private companies are like “guests who have outstayed their welcome.” The authors explain how these data have historically been misused.
  • Authors Respond to Comments on Their New S Corp Book (BVR Editor). BVR has received comments on the new book, Taxes and Value:  The Ongoing Research and Analysis Relating to the S Corporation Valuation Puzzle, by Nancy Fannon and Keith Sellers. The authors respond to what some say is an omission of certain studies they feel are relevant and should have been included in the book.
  • Why Valuation Experts Should Not Use the Term ‘Non-Marketable’ (Ronald D. Rudich). The author puts forth a new paradigm describing levels of value that moves away from the use of a negative term when informing clients of the value of their control or minority interest.
  • BVU PROFILE: A Perspective on Business Valuation From South of the Border. An interview with Adriana Berrocal, the founder and managing director of BValue Consulting, a firm based in Mexico City.
  • IPCPL and Margin Reversion: Implications for the Valuation of Small Privately Held Companies (Igor Gorshunov). The author describes an empirical test he conducted of the implied private company pricing line (IPCPL), which is a new method designed to eliminate the inherent problems in comparing public and private data. IPCPL adds another approach in estimating the cost of capital for a privately held business.
  • Pros and Cons of Models for Estimating the Cost of Equity in a Global Setting (BVR Editor). At the 2015 International Valuation Forum in Atlanta, sponsored by the International Association of Consultants, Valuators and Analysts (IACVA), James Harrington (Duff & Phelps) gave a rundown of the models for developing the equity component of international cost of capital using the capital asset pricing model (CAPM).
  • Valuators Are Now Entering the M&A Picture Sooner (Raymond Weisner). The author, who is with Valuation Research Corporation, sees that more and more companies are performing pre-acquisition valuations, and valuators are being called in earlier in the process. He explains the valuation issues they are focusing on during this time.
  • New Features: Ask the Experts and Tip of the Month. Valuation experts answer puzzling questions and give some practical advice on a wide variety of topics.

To read these articles—as well as digests of the latest court cases—see the September issue of Business Valuation Update (subscription required).

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