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.
New Country Risk Data Update Reminds Valuers of Factors to Consider
A data update from Aswath Damodaran (New York University Stern School of Business) helps valuation experts explain how they considered each of the risk factors in assessing value for business assets located outside of the U.S.
A Look Back: Including ESG in Valuation Models
Quantified the impact of environmental, social, and governance (ESG) factors and measuring their effects is not a new phenomenon. Thanks to the BVResearch Pro platform, here are two ways experts have done this before.
BVU News and Trends April 2023
A monthly roundup of key developments of interest to business valuation experts.
Global BV News: In China, the ‘G’ in ESG impacts COE the most
For Chinese-listed companies, there is a significant negative correlation between the environmental, social, and governance (ESG) score and the firm’s cost of equity (COE), a new paper finds.
Financial Expert Guide for Family Law Judges and Attorneys, National Edition
April 2023 PDF, Softcover (413 pages)
John Tatlock, Kevin Yeanoplos, Ron Seigneur
Business Valuation Resources, LLC
Damodaran posts 2023 edition of ERP paper
The “dean of valuation,” Professor Aswath Damodaran (New York University Stern School of Business) has posted “Equity Risk Premiums (ERP): Determinants, Estimation and Implications—The 2023 Edition.”
Fernandez releases survey of 2023 risk premiums and risk-free rates
The results of Professor Pablo Fernandez’s latest survey of the market risk premiums and risk-free rates used in 80 countries in 2023 are now available.
Global BV News: Emerging markets ramping up ESG efforts, per BCG
Although they had a slow start getting on the ESG bandwagon, emerging markets are catching up big time.
BV News and Trends March 2023
A monthly roundup of key developments of interest to business valuation experts.
Damodaran to give critical perspective of ESG
Never one to mince words, Aswath Damodaran (New York University Stern School of Business) called it “the most overhyped, oversold concept in the history of business.”
Global BV News: CFA Institute issues Kroll’s global cost of capital 2022 summary edition
The CFA Institute Research Foundation has put out the “Valuation Handbook—International Guide to Cost of Capital 2022 Summary Edition” from Kroll.
Size effect is hibernating, per new paper
The size premium is more significantly related to monetary policy than to firm quality or to business cycle troughs, according to a new paper.
Still open: 2023 Pepperdine private cost of capital survey
At press time, the Pepperdine University annual survey of expected rates of return with respect to private companies is still open.
Global BV News: Updated study of European capital markets released
The 11th edition of the “ValueTrust European Capital Market Study” provides an analysis of cost of capital parameters, returns (implied and historical) and trading multiples.
SEC climate proposal is key topic during KPMG panel
At the recent Global Financial Reporting and Valuation Conference, a panel of KPMG leaders shared their knowledge and insights on the evolving landscape regarding environmental, social, and governance (ESG) factors. During this session, audience members were particularly interested in how the SEC climate proposal can impact private companies.
COE Estimates From Leading Data Sets Are All ‘Very Close’
Jim Hitchner conducted a hypothetical engagement using Kroll’s Navigator, BVR’s Cost of Capital Professional, the Pepperdine study, and Damodaran’s data to estimate cost of equity (COE).
BV News and Trends February 2023
A monthly roundup of key developments of interest to business valuation experts.
Damodaran examines impact of inflation on profitability
In his fifth data update for 2023, Professor Aswath Damodaran (New York University Stern School of Business) focuses on trends in company profitability in 2022, including the impacts of inflation.
A Hybrid Approach to Determining Company-Specific Risk
This webinar will first explain the theoretical reasoning as to why a company-specific risk premium is necessary for a small business when using the buildup method to estimate the cost of capital. I will then present a hybrid approach using the multiattribute utility model to quantify the company-specific risk premium. Finally, I will show how to incorporate Monte Carlo simulation into the model to determine the range of potential company-specific risk premium. Attendees will have ...
Inflation appears to have peaked, per Kroll
The latest cost of capital infographic from Kroll says that inflation seems to have topped out toward the end of 2022.
Year-end 2022 data now in the Cost of Capital Professional
Year-end 2022 data, including equity risk premia, CRSP decile size premia, and industry betas/IRPs, are now available in BVR’s Cost of Capital Professional platform.
BV Year in Review 2022: Ongoing Challenges
What did you miss in 2022? Catch up on the highlights in the business valuation profession through over 70 articles and hundreds of news items this newsletter covered in 2022.
BV News and Trends January 2023
A monthly roundup of key developments of interest to business valuation experts.
Global BV News and Trends January 2023
Business valuation news from a global perspective.