“Has anybody read Eric Nath’s ‘The Biggest Valuation Myth’ … mentioned in a recent BVWire,” asks Michael Molder (Philadelphia) to members of LinkedIn’s BV Professionals group (registration required). “Any thoughts?”
“Yes, I have read it,” says Toby Tatum (Alliance Business Appraisal), who adds that he has “modified my income approach template narrative with [a] quote from his article to introduce and support my size effect adjustment to the discount rate.” Tatum has also written his own article, “A New Method to Develop a Discount Rate for Small Businesses Using SBBI Data,” posted at his website.
To date, there are nearly 50 comments in the LinkedIn discussion thread, with most participants commending Nath for his “profound insights” and for “putting together a great paper” that is well worth the read. As a reminder, Nath’s article on how traditional methods may not reliably quantify the equity risk premium (ERP) is available at his website.