The Overlap of Company-Specific Risk and the Size Premium

BVResearch Pro
Training Event Transcripts
August 25, 2011
James P. Harrington
Ted D. Israel, CPA/ABV/CFF, CVA

Summary

As noted in the June 8 edition of BVWire #8482;, recent work by Ted Israel and James Harrington have posited that the size premium is alive and well and that some company-specific risk measures are being double counted as they are already embedded in the subject company's earnings stream. Says Israel: "[W]e're spending too much time obsessing over the denominator [the discount rate] and ignoring the effects on the numerator [earnings]." On August 25, BVR welcomes Harrington and Israel for examination of these and other issues pertaining to their research in The Overlap of Company-Specific Risk and the Size Premium. This discussion on the overlap between company-specific risk, the size premium, and other cost of capital issues is not to be missed.
The Overlap of Company-Specific Risk and the Size Premium
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