Is 6% Now the Best Estimate of ERP?
The Ibbotson® SBBI® Valuation Yearbook indicates that the equity risk premium is 7.1%, while Duff & Phelps indicates 4.9%. But Roger Grabowski and Shannon Pratt, speaking at the recent BVR/FAE Thought Leadership Workshop of Cost of Capital in New York Ci ...
Book Review: The 2014 Valuation Handbook – Industry Cost of Capital
When my copy of the 2014 Valuation Handbook – Industry Cost of Capital (Duff & Phelps) arrived, the cover somehow struck me as familiar. I checked my library, and, sure enough, the cloth-over-cardboard cover was the same type of binding as that on my cost ...
FASB Meeting April 2, 2009: Insights on proposed FSP FAS 157-e
David Larsen, managing director in Duff & Phelps’ (D&P) San Francisco office and member of the D&P’s Portfolio Valuation practice, offers an insightful summary and insights on the Financial Accounting Standards Board met on April 2, 2009 to discuss Propos ...
An In-Depth Look at the New D&P Valuation Handbook
The SBBI Valuation Yearbook from Morningstar Inc. and the Duff & Phelps Risk Premium Report were the two most common resources utilized by valuation professionals for estimating the cost of capital through 2013. In September 2013, Morningstar Inc. announ ...
Buy-Sell Agreements: Opportunities & Challenges for Business Appraisers (Part 3 of 3)
Teleconference Presentation & Transcript July 19, 2007 Moderator: Z. Christopher Mercer, CEO of Mercer Capital Panelists: Roger J. Grabowski, Managing Director of Duff & Phelps, LLC James R. Hitchner, Managing Director of The Financial Valu ...
BVU News and Trends November 2018
A monthly roundup of key developments of interest to business valuation experts.
Industry Risk Premiums: How Do We Get There?
The industry risk premium (IRP) is an integral part of the cost of capital in both the CAPM and BUM methods. In the CAPM, it is encapsulated in the beta, and, in the BUM, it is determined by other methods, including the use of the Duff & Phelps industry risk premiums included in its annual Valuation Handbook - Guide to Cost of Capital. What do you really know about the IRP and what it does ...
BV movers . . .
David Larsen, managing director in Duff & Phelps’ Alternate Asset Advisory Service practice, and Greg Franceschi, managing director and global leader of the firm’s Financial Reporting Practice, have been appointed to the AICPA working group responsible for updating the AICPA Valuation of Privately-Held-Company Equity Securities Issued as Compensation—Accounting and Valuation Guide.
Failure to explain inputs gets expert excluded under Daubert
If more proof is necessary to show that courts across all legal fields dive deep into the details of valuation testimony, a recent damages case that arose in the context of a condemnation proceeding should do the trick.
Terminal Value: A Perpetual Issue in Valuation
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 ...
Using the Industry Cost of Capital Handbook to Provide Better, Defensible Cost of Capital Estimates
Join Jim Harrington of Duff & Phelps for this highly anticipated free webinar. Learn what's new and how to use the 2015 Valuation Handbook - Industry Cost of Capital. Get practical guidance with a case study and discussion of how to incorporate industry analysis into your valuation reports. The 2015 edition includes cost of capital estimates (equity capital, debt capital, and WACC) for over 200 U.S. industries, plus a host of detailed statistics that can be ...
Seven Models for Estimating the Cost of Equity in a Global Setting: The Pros and Cons
What is a good method for developing the equity component of international cost of capital using the capital asset pricing model (CAPM)? Jim Harrington, director at Duff & Phelps (U.S.) and co-author of the 2015 International Valuation Handbook – Guide to Cost of Capital, explains that you can use a number of models to estimate the cost of equity capital in a global environment, but there is no consensus among academics and practitioners as to the “best” model to use.
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.
BVU News and Trends June 2018
A monthly roundup of key developments of interest to business valuation experts.
Grounding Retrospective Solvency Analyses in Contemporaneous Information (2 of 3)
Courts frequently use contemporaneous information to assess a debtor's solvency as of the date a disputed transfer was made or a disputed obligation was incurred. This is the 2nd of three papers that provides a business valuation practitioner's perspective on how to use contemporaneous information to assess the debtor's solvency on the relevant date. This paper addresses the use of contemporaneous actions (excluding stock and debt prices, which were addressed in the 1st paper) that ...
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.
The Size Effect Continues To Be Relevant When Estimating the Cost of Capital
In this paper, I will review the size effect, potential reasons why one observes the size effect, and correct common misconceptions and address criticisms of the Size Premia (SP). Specifically, we demonstrate that the size premium critique by Cliff Ang is not warranted and that the alternative methodology proposed by that author is misleading and cannot be considered as an alternative to the Duff & Phelps’ SP. Subsequently, we will highlight some methodological issues with ...
Modified CAPM: Robust or The Bed of Procrustes?
In Greek mythology, Procrustes had an odd sense of hospitality: He abducted travelers, provided them with a generous dinner, and then invited them to spend the night in a rather special bed. He insisted the bed fit his guest to perfection. Those too tall had their legs chopped off with a sharp hatchet; those too short were stretched. In his latest book, The Bed of Procrustes, Nassim Taleb argues that those who use economic and ...
Chancery relies on income approach to determine fair value in problematic bank merger
In a statutory appraisal action, the Delaware Court of Chancery recently found the deal price did not reflect fair value because the sales process was suboptimal. Certain other methods the parties' experts used also were inadequate to the task, the court said.
BVR hosts ‘Cost of Capital’ week
Get all the most important updates on cost of capital plus CPE credits ...
CPE events
A Practical Guide to Valuing Contingent Considerations, (January 17), with Jonathan Tang (Empire Valuation).
CalCPA presents one day conference on company specific risk
CalCPA’s one day Business Valuation Conference is scheduled for June 3, 2011 in San Francisco.
Overall value of IPL business up by 26%
The Indian Premier League (IPL) has seen a spike in its brand valuation to $5.3 billion after the 10th edition.