Does the expert have a thorough understanding of the business and has he or she considered the eight factors of Revenue Ruling 59-60? Why does the expert believe his or her determination of the normalized income to capitalize best represents the expected future performance of the company? Under the DCF method, can revenues realistically grow at the projected rates and do the expenses support the revenues?
These are just a few of the many questions a judge will ask about your opinion of value. You’ll find a lot more in a new book, The Business Valuation Bench Book, by William J. Morrison (WithumSmith+Brown) and Jay E. Fishman (Financial Research Associates), two well-known valuation specialists. The book is designed to give judges and attorneys a reference guide of fundamental business valuation concepts. For valuation experts, it will help you prepare for court and give you insights into how to review and critique the work of other experts.
Extra: For a more in-depth look at the role of the financial expert, see the newly released Litigation Services Handbook: The Role of the Financial Expert, 6th edition, which gets into the fine points of trial preparation, deposition, and testimony.
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