Business Valuation Update

April 2003

Vol. 9 No. 4

Table of Contents

Editor's Column

• Empirical evidence shows holding period of major determinant of marketability discount (Shannon P. Pratt, CFA, ARM, ABAR, FASA, MCBA, CM&AA)

Featured Articles

• Valuation issues in financial reporting: FAS 141 & 142 and beyond! (Mark L. Zyla, CPA/ABV, CFA, ASA)

Legal and Court Case Update

• Value set by EBITDA but debt not deducted
• Valuations based on redemption price set by corporations upheld
• Stock redemption price is reliable evidence of value; expert testimony excluded because of failure to comply with discovery rules
• Non-expert valuation testimony upheld where husband failed to appear at trial
• No Proof of 'Loss Causation' Required in Massachusetts for Common Law Fraud Claim
• Minority Shareholder Cannot Invoke Protections of Cal. Corp. Code 2000
• Fair Value Is Pro Rata Share of Sale Price in Arm's-Length Asset Sale
• Estate Fails to Meet 2036(a) Requirements; Partnership's Assets Included in Gross Estate
• Court rejects acquisition value for minority interest
• Businesses started before legal separation are marital
• Businesses debt awarded to same party as business

Data and Publications Update

• Wiley's EBV software useful tool for automating and deed standardizing valuation process
• What's new in the 2003 edition of Tom West's Business Reference Guide
• Technology value highest for most advanced stages of clinical development
• QMDM or restricted stock studies?
• How to apply the Silber model in a valuation
• Business valuation by dealmakers'a "how to" guide for entrepreneurs and valuation analysts
• Benchmark averages misleading when estimating control premiums/minority discounts
• Applying traditional DCF to high risk businesses results in over valuation
• ABA Family Law Section focuses on valuing the business in divorce

Cost of Capital

• Cost of Capital - 4/1/2003

Reader and Editor Exchange

• How to compute intangible assets amortization benefit