Twitter poll on the size effect
Wes Gray, a Ph.D., financial analyst, and CEO of Alpha Architect, recently conducted a poll on Twitter about the size effect (implicit in traded stocks where returns can be observed).
Appraiser Uses Direct Way to Estimate Private-Company Cost of Equity
One appraiser, after 25 years and over 1,000 valuations of small owner-operated businesses, says that these firms bear no relation to public companies, so why look to the public markets for data when estimating cost of capital? Here’s the method he uses, which looks directly at the private capital markets and does not require any expensive resources.
Whatever Happened to Specific Company Risk? Accounting for Management Risk in Private Partnerships
Multidisciplinary valuation projects set many traps for the unwary. Join Dennis Webb to learn about one such trap that affects virtually every asset holding company valuation because the real property appraiser and business valuer usually don’t know what the other needs. For specific company risk, such an omission can be quite a big deal.
Reminder: Feedback wanted on company-level beta module for the Navigator
Kroll (formerly Duff & Phelps) is developing a new module for its Cost of Capital Navigator that will enable users to derive company-level betas based on their own selection of comparable companies.
Reminder: Pepperdine’s private cost of capital survey
Many valuation experts refer to the annual “Pepperdine Private Capital Markets Report” when estimating small private-company cost of capital.
Year-end 2021 data now in the Cost of Capital Professional
Year-end 2021 data, including equity risk premia, CRSP decile size premia, and industry betas/IRPs, are now available in BVR’s Cost of Capital Professional platform.
Damodaran posts second data update, explains implied ERP
An extensive amount of free data on risk-free rates, equity risk premiums (ERPs), corporate default spreads, corporate tax rates, country risk premiums, and more can be found on the website of Professor Aswath Damodaran (New York University Stern School of Business), who generously posts updates each year.
Feedback wanted on company-level beta module for the Navigator
Kroll (formerly Duff & Phelps) is developing a new module for its Cost of Capital Navigator that will enable users to derive company-level betas based on their own selection of comparable companies.
Reminder: Pepperdine’s private cost of capital survey is now open
Forty percent of valuation experts use the annual “Pepperdine Private Capital Markets Report” for estimating small private-company cost of capital, according to a BVWire poll.
Cost of Capital in Cross-Border Valuations
Join Carla Nunes and James P. Harrington, both of Kroll (formerly Duff & Phelps), for a presentation about developing cost of capital estimates for cross-border (i.e., international) valuations. This presentation includes a comprehensive case study along with a framework for cross-border valuations and common errors to avoid. Hear a discussion of models and data sources, and see the models in action.
This year’s Pepperdine private cost of capital survey is now open
Forty percent of valuation experts use the annual “Pepperdine Private Capital Markets Report” for estimating small private-company cost of capital, according to a BVWire poll.
Damodaran posts his data update for 2022
Each year, Professor Aswath Damodaran (New York University Stern School of Business) generously posts a great amount of data on his website that include risk-free rates, equity risk premiums (ERPs), corporate default spreads, corporate tax rates, country risk premiums, and other data—all of which are free.
Kroll reviews 2021 capital markets
“Capital Markets Insights—2021 Year in Review” offers a look at the past year in terms of notable S&P 500 performers, DJIA performers, M&A deals, PE deals, IPOs, SPACs, bankruptcies, cost of capital, and private markets.
Business Valuation Update Yearbook, 2022 Edition
January 2022 PDF (454 pages)
BVR (editor)
Business Valuation Resources, LLC
Valuing a Business, 6th Edition
April 2022 Hardcover
Shannon Pratt
McGraw-Hill Co.
Good News: Key Research on Private Cost of Capital Is Back
On the brink of ending its long run, the Private Capital Markets Project from Pepperdine University has secured funding to continue its ongoing survey of expected rates of return of providers in the private capital market.
Measuring, Documenting, and Defending the Company-Specific Equity Risk Premium Selection
Join Robert Reilly and Connor Thurman for a dive into the theoretical basis for including a company-specific equity risk premium (CSRP) in the analyst’s cost of equity capital measurement analysis. Learn about measurement procedures and documentation procedures that the analyst may need to perform in the CSRP selection analysis. Also attendees will receive guidance to aid the analyst in the defense of the CSRP selection in a litigation context. Get the best practices you need ...
Understanding Business Valuation - 6th Edition
February 2022 Hardcover, PDF
Gary Trugman
Business Valuation Resources, LLC
Surprising results in private cost of capital survey
Over half (58%) of privately held business owners believe their cost of equity is less than or equal to 12%, according to the “2021 Private Capital Markets Report” from Pepperdine University Graziadio School of Business and Management.
New Pepperdine report on private cost of capital released
The “2021 Private Capital Markets Report” is now available from the Pepperdine University Graziadio Business School.
D&P/Kroll survey of cost of capital inputs
During a recent Duff & Phelps (a Kroll business) webinar, the audience was polled on various valuation and cost of capital topics.
Size effect is ‘fiction,’ Damodaran reiterates
“There has been no size premium for the past 40 years,” said Professor Aswath Damodaran (New York University Stern School of Business), who has been called the “Dean of Valuation.”
Pepperdine private cost of capital survey is open
A BVWire poll found that 40% of respondents use the Pepperdine Private Capital Markets Reports for estimating small private-company cost of capital.
Reminder: Take the Pepperdine private cost of capital survey
The Pepperdine Private Capital Markets Project conducts an annual survey of expected rates of return with respect to private companies.
Pepperdine private cost of capital project is back up and running
On the brink of ending its long run, the Private Capital Markets Project from Pepperdine University has secured funding to continue its ongoing survey of expected rates of return of providers in the private capital market.