Feedback Wanted on New Model for Small Firm Risk
A variation of the multiattribute utility model (MUM) used along with Monte Carlo simulation forms the basis of a new model for estimating a company-specific risk premium (CSRP) for small, closely held businesses. Excel templates are available from the model’s developer, David Goodman (Jesson, Oslin & Associates), and feedback is welcome.
Risk Premiums: A Look at CSRP
Is anything “company-specific” per se? Company-specific risk is not an ideal name for this risk. All firms face company-specific risks, many of which are somewhat similar across industries and companies. For example, how many firms have you valued that had to deal with the risk of customer concentration?
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TIMELY NEWS, ANALYSIS, AND RESOURCES FOR DEFENSIBLE VALUATIONS Vol. 27, No. 5, May 2021 BUSINESS VALUATION UPDATE bvresources.com Reprinted with permissions from Business Valuation Resources, LLC By Peter J. Butler, Valtrend (Eagle, Idaho, USA) Is anything “company-specifc” per se? Company- specifc risk is not an ideal name for this risk. All frms face company-specifc risks, many of which are somewhat similar across industries and com- panies. For example, how many frms have you valued that had to deal with the risk of customer concentration? How about dependence ...
Input Needed to Develop New Guidance on Company-Specific Risk
This is an update on new guidance being developed by The Appraisal Foundation’s Business Valuation Resources Panel’s Work Group on Company-Specific Risk Premia (CSRP). It needs input from practitioners on this topic.
New paper on CEO tenure and firm value
If you’re valuing a business with a CEO who has been in that job for 20 years, is that a positive or a negative?
CSRP working group needs input
The Appraisal Foundation’s Business Valuation Resources Panel’s Work Group on Company-Specific Risk Premia (CSRP) is seeking input via survey to understand how valuation practitioners address such premia within their valuations.
Reminder: Please take a survey about company-specific risk
BVWire is pleased to present a survey by The Appraisal Foundation’s Business Valuation Resources Panel’s Work Group on Company-Specific Risk Premia to understand how valuation practitioners address such premia within their valuations.
Reminder: Please take a survey about company-specific risk
BVWire is pleased to present a survey by The Appraisal Foundation’s Business Valuation Resources Panel’s Work Group on Company-Specific Risk Premia to understand how valuation practitioners address such premia within their valuations.
Please take a survey about company-specific risk
BVWire is pleased to present a survey by The Appraisal Foundation’s Business Valuation Resources Panel’s Work Group on Company-Specific Risk Premia to understand how valuation practitioners address such premia within their valuations.
Age- and gender-specific risk? A new paper says it exists
We’d like to be a fly on the wall the first time a valuation expert testifies that his or her company-specific risk factor was adjusted for the age and gender of the subject firm’s top managers.
Cybersecurity Risk in the Business Valuation Profession
Every company—large and small alike—now faces material risks related to data security and privacy concerns that need to be addressed when performing a business valuation. This is a challenging area for valuators because it is a complex issue and there is little guidance or empirical data to help quantify these risks. Fortunately, ideas and techniques are emerging to help pave the way to better understand and measure the impact of data security and cyber liability risks on the value of a business.
BVR Briefing – Cybersecurity in Business Valuation: Addressing the Impact of Data Breaches on Value
March 2020 PDF (37 pages)
Business Valuation Resources, LLC
Should appraisers be guessing on company-specific risk?
Of all the components that make up the cost of equity (COE), the company-specific risk premium (CSRP) often has the biggest impact on your discount rate. And, while appraisers rely on hard data for all of the other inputs in the COE, the CSRP is more or less a guess—which can send your business valuation off course. Check out BVR's infographic.
Revenue mix is key to valuing HVAC companies
There is a big swing in prices for HVAC firms—from under 10% of revenue to over 100% of revenue—depending on the mix of business.
Bonding is a key valuation nuance for electrical contractors
The bonding process is very important for electrical contractors, especially in large metropolitan areas where they can’t work on certain jobs without being bonded.
Defense expert testimony supports ESOP valuation and fairness opinions
A recent ESOP decision involving allegations of breach of fiduciary duty and engaging in a prohibited transaction turned on whether the ESOP trustee’s financial advisor had performed proper due diligence and issued defensible fairness and valuation analyses.