What corporation tax rate should you use in your business valuations now?
The Finance Act 2016 set corporation tax for 2020-21 at 17%, but the Conservative party intends to increase the rate to 19% (and maintain that rate for the rest of the new Parliament).
In re Panera Bread Company
In appraisal action involving sale of public company, court says sale process had “objective indicia of reliability,” justifying use of deal price for fair value determination; synergy deduction is appropriate to account for value from anticipated cost and tax-related savings due to merger.
Court Considers Deal Price Persuasive Indicator of Fair Value and Approves Synergy Deduction
In appraisal action involving sale of public company, court says sale process had “objective indicia of reliability,” justifying use of deal price for fair value determination; synergy deduction is appropriate to account for value from anticipated cost and tax-related savings due to merger.
Manichaean Capital, LLC v. SourceHOV Holdings, Inc.
In appraisal proceeding, Court of Chancery adopts petitioner expert’s DCF-based model for calculating fair value, making slight adjustment to expert’s size premium; on beta calculation, court finds respondent expert’s novel approach “does not survive judicial scrutiny” and raises Daubert issues.
Novel Beta Method Occasions Rebuke From Court of Chancery in Appraisal Case
In appraisal proceeding, Court of Chancery adopts petitioner expert’s DCF-based model for calculating fair value, making slight adjustment to expert’s size premium; on beta calculation, court finds respondent expert’s novel approach “does not survive judicial scrutiny” and raises Daubert issues.
Business Valuation OIV Journal Fall 2019
Business Valuation OIV Journal has been created by Organismo Italiano di Valutazione (OIV), the Italian Valuation Standard Setter, to provide a forum for discussion and to foster cultural progress in the field of business valuation. In this issue, articles include "Roundtable: 10 Big Issues in Business Valuation"; "The Limits of Accounting Rates of Return and the Calibration Trap in Applying Accounting-Based Models in Modern Business Valuation Practice"; and "Connecting Economic Value to Company Strategy: Critical Issues and New Perspectives."
Bankruptcy Court highlights comparables selection in assessing experts’ valuations
A meaningful comparable company analysis requires careful selection of comparable companies, the Bankruptcy Court recently emphasized in a case in which it ruled on the debtor’s proposed reorganization plan.
Discover the magical functions of Excel for BV
Spreadsheets can be a valuation analyst’s best friend, or a worst enemy, according to Shawn Hyde (Canyon Valuations), a valuation practitioner and Excel enthusiast.
Smarter Spreadsheets: Improving the Efficiency and Accuracy of a Valuation in Excel
This Isn’t Your Father’s Microsoft Excel. Spreadsheets are a very useful tool for completing any analysis, not just for business appraisal, but for all kinds of projects. Unfortunately, many users never realize just how powerful Microsoft Excel actually is. Valuation expert and Excel enthusiast Shawn Hyde is here to share all of the functions and tools that have been added over the years that have really make an impact on valuation’s most utilized software. Experience ...
BVU News and Trends December 2019
A monthly roundup of key developments of interest to business valuation experts.
Bankruptcy Court Calls Choice of Comparables ‘Key Value Driver’ in Expert Valuations
Ruling on plan confirmation, Bankruptcy Court finds debtor expert’s determination of total enterprise value of reorganized debtor more credible than committee for unsecured creditors’ expert; in adopting debtor expert’s comparable company analysis, court calls choice of comparables set a “key value driver.”
In re Emerge Energy Services LP
Ruling on plan confirmation, Bankruptcy Court finds debtor expert’s determination of total enterprise value of reorganized debtor more credible than unsecured creditors’ expert; in adopting debtor expert’s comparable company analysis, court calls choice of comparables set a “key value driver.”
BVU News and Trends November 2019
A monthly roundup of key developments of interest to business valuation experts.
Highlights of 2019 Delaware Valuation Decisions
This year to date has been another active period for valuation cases in the Delaware courts. Six cases are reviewed and the predominant theme is that, in arm’s-length transactions, appraisal value continues to be based primarily on the transaction price rather than on discounted cash flow.
Back to the Future? Exploding the Income Approach
Seeing the future? Compensating for excessive compensation? The feared levering and unlevering! What to do? Well don’t discount the advice of this expert panel as they work their way through the income approach from top to bottom. Join Bethany Hearn, Brenda Clarke, Kevin Yeanoplos, and Bob Dohmeyer in this entertaining and engaging web workshop. Half this event will focus on the numerator with a curated selection of hot issues such as forecasting, free cash flow ...
Details of the CUT method used in the Amazon case
Last week’s BVWire covered the 9th Circuit decision in the Amazon case that affirmed the U.S. Tax Court’s 2017 decision in favor of the company in a transfer pricing case.
Tax Court adopts tax-affected valuation of PTE without overturning Gross
For years, the appraisal community has wondered when the U.S. Tax Court will recognize the need for tax affecting when valuing pass-through entities (PTE) and how the court will square its decision with precedent, i.e., the Gross case in which the Tax Court rejected the taxpayer’s tax-affected valuation.
Tax Court’s Amazon valuation ruling stands up to 9th Circuit scrutiny
The 9th Circuit recently affirmed the U.S. Tax Court’s 2017 decision in favor of Amazon in this key transfer pricing case, finding the governing regulations limited the definition of “intangible” to independently transferrable assets.
DCF Modeling for Early Stage Enterprises: A Fair Value Update
In In this panel discussion Antonella Puca, Andreas Dal Santo and Shilpa Chandra will discuss the special characteristics of DCF modeling as they pertain to the valuation of companies that are in the early years of their life and that have yet to become profitable (early stage enterprises or “ESE”s). Learn the relevance of terminal value in driving valuation for ESEs and the dynamic nature of the model, which can be adjusted at subsequent measurement ...
Columbia Pipeline ruling highlights terminal value flaw in expert’s DCF
In the Columbia Pipeline statutory appraisal action, the Delaware Court of Chancery recently rejected the petitioner expert’s discounted cash flow analysis to determine fair value and, in a short but noteworthy discussion, explained why the court has come to question the usefulness of the DCF in many instances.
A Script for Pharmacy Valuation
The U.S. healthcare industry is very large, complex, and changing rapidly. This highly regulated industry is also a significant user of valuation services, primarily to support transactions, contracting, and internal strategic planning purposes. The importance of consummating transactions within fair market value cannot be overstated, as the alternative can result in substantial financial consequences to the parties involved. As such, advisors need to know the operational and valuation issues associated with healthcare entities so they ...
Deal price prevails in yet another Delaware statutory appraisal ruling
Nine days after his ruling in Columbia Pipeline, Vice Chancellor Laster again found the deal price was the most reliable indicator of fair value in a statutory appraisal case involving a publicly traded mining company.
In re Appraisal of Jarden Corp. (II)
Responding to petitioners’ motion for reargument, court concedes and corrects errors in court’s original DCF analysis but finds corrected DCF model still corroborates the original fair value determination; court affirms its reliance on unaffected market price as fair value indicator.
Court Says Corrected DCF Still Supports Original Fair Value Determination
Responding to petitioners’ motion for reargument, court concedes and corrects errors in court’s original DCF analysis but finds corrected DCF model still corroborates the original fair value determination; court affirms its reliance on unaffected market price as fair value indicator.
Avoid this inconsistency with the terminal value
Terminal value calculations use a perpetuity model that, when using Gordon growth, assumes cash flows occur at the end of each year.