There have been many studies on the size premium but with conflicting results. Now, the first “meta-analysis” of the size premium provides an estimate that is smaller than what many people believe, according to a new paper.
A veteran appraiser presents an interesting retrospective on the cost of capital and offers some observations on current practice.
“Investors require no premium to hold small stocks over big stocks in normal times,” says a recently updated paper on the size premium.
Both platforms give similar results when estimating the cost of capital for private firms. They were put through their paces at a recent conference presented by the Virginia Society of CPAs.
Duff & Phelps has decreased its U.S. normalized risk-free rate from 3.5% to 3.0% effective 30 September 2019, the firm says in a statement.
Duff & Phelps has decreased its U.S. normalized risk-free rate from 3.5% to 3.0% effective Sept. 30, 2019, the firm says in a statement.
Published research has overstated the size premium, says ‘Firm Size and Stock Returns: A Quantitative Survey,’ a new analysis conducted by Anton Astakhov, Tomas Havranek, and Jiri Novak from the Institute of Economic Studies at Charles University in Prague.
The debate over the size premium in stock returns has raged for years, with no consensus over the magnitude or stability—or even the existence—of the size premium. There have been many studies on the size premium but with conflicting results.
Aswath Damodaran (New York University Stern School of Business) continues to provide country risk comparisons on his website.
In a recent court case, the valuation expert tried to use professional judgment but the data being used did not support her opinion. The expert could not adequately explain why she chose not to go where the data led her.
BVR’s Cost of Capital Professional and the Duff & Phelps Cost of Capital Navigator went head-to-head for the first time, headlining the annual two-day conference of the Virginia Society of CPAs.
Led by cost reductions at Chinese manufacturers, and assuming a 7% weighted average cost of capital, solar energy is now the cheapest power source—in England!
Business Valuation Update attended the recent NYSSCPA business valuation conference in New York City where several attendees expressed concerns about entering sensitive client data into online tools for estimating the cost of capital. The providers of the Duff & Phelps Cost of Capital Navigator and BVR’s Cost of Capital Professional respond to these concerns.
The historical approach (ex post) is the preferred approach in estimating the equity risk premium (ERP), according to 76% of respondents to our latest survey.
BVWire will be heading to Glen Allen, Va., for the Business Valuation, Fraud & Litigation Services Conference on September 19-20, sponsored by the Virginia Society of CPAs.
Our latest minisurvey on the cost of capital reveals that the historical approach (ex post) is the preferred approach in estimating the equity risk premium (ERP), cited by 75% of respondents.
If you haven’t checked out BVR’s new Cost of Capital Professional, now’s the time to do it.
When you drive your car, should you look through your windshield or the rearview mirror?
Willie Sutton robbed banks “because that’s where the money is.” The terminal value is an important component of a business valuation because that’s where most of the value is. Join Michael Vitti and Seth Fliegler of Duff & Phelps as they address the nuts and bolts of determining the terminal value, as well as issues that are brought up within the business valuation community and mistakes to avoid. Be better prepared to address terminal value-related ...
Two-thirds of survey respondents say they use the spot yield on Treasury bonds for their risk-free rate when developing an estimate for the cost of capital, according to BVWire’s latest survey.
Two sources of industry betas are now included in BVR’s Cost of Capital Professional (CCPro) to help in estimating the industry risk premium (IRP) component of the buildup method for developing the cost of capital for a private company. For appraisers that choose to use an IRP, care must be taken and there are some important factors to consider.
Preliminary results from our latest cost of capital survey reveal that the spot yield on the 20-year U.S. Treasury bond is most often used as the basis for the risk-free rate.
Please take part in the second in our series of short surveys to investigate how appraisers derive cost of capital in their valuations of private companies.
If you use one of the new online tools that help you estimate the cost of capital, you may be worried about data security.
A significant number of valuation experts look to the private capital markets when estimating the cost of capital for a private firm, according to a BVWire survey.