High ESG scores lower the cost of capital, study finds
A recent paper says there is significant evidence that companies having a higher environmental, social, and governance (ESG) score have a lower cost of capital.
Reminder: The 2023 Pepperdine private cost of capital survey is now open
Every year, Pepperdine University conducts an annual survey of expected rates of return with respect to private companies.
Business Valuation Update Yearbook, 2023 Edition
January 2023 PDF, Softcover (426 pages)
BVR (editor)
Business Valuation Resources, LLC
Damodaran posts his data update for 2023
At the beginning of 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.
The 2023 Pepperdine private cost of capital survey is now open
Every year, Pepperdine University conducts an annual survey of expected rates of return with respect to private companies.
BV News and Trends December 2022
A monthly roundup of key developments of interest to business valuation experts.
Takeaways from the final big BV event of 2022
The beach or the ski slope? Those were the options for attendees who ventured out to either Park City, Utah, or Fort Lauderdale, Fla., for the NACVA Business Valuation & Financial Litigation Super Conference last week.
Firm nimbleness as a measure of risk
Investors perceive firms with higher levels of inflexibility, such as not being able to scale operations or adapt to changes in profitability, as being riskier and have a higher implied cost of equity, researchers conclude in a new paper.
New Pepperdine Report Creates Buzz at the NACVA Conference
One of the more well-attended sessions at the Business Valuation & Financial Litigation Super Conference hosted by the National Association of Certified Valuators and Analysts (NACVA) was a session Dr. Craig R. Everett conducted. He is the project director of the Private Capital Markets Project from Pepperdine University, which does an ongoing survey of expected rates of return of providers in the private capital market.
BV News and Trends November 2022
A monthly roundup of key developments of interest to business valuation experts.
Valuations of German and European banks
The decline in market capitalizations coupled with a positive earnings outlook has led to record levels of the implied cost of equity of 14.8% for European banks and 17.8% for German banks, according to the latest edition of the Alvarez & Marsal’s “Germany Valuation Insights.”
Embracing Subjectivity: The Illusion of Precision in BV
Nothing keeps a valuator up at night more than “squishy numbers.” Everyday someone comes up with another “objective quantitative method” that eliminates subjectivity. But guess what? Many of the methods are actually increasing the subjectivity exponentially and creating the illusion of precision. In this rip roaring session, we will shine a light on all of the subjective areas of the valuation process and learn to embrace it.
Inflation showcased in lead-off session at the AICPA FVS conference
As this issue rolls off the (virtual) presses, BVWire is attending the AICPA & CIMA Forensic and Valuation Services Conference.
Global BV News: KPMG releases cost of capital study
KPMG has published its “Cost of Capital Study 2022” that addresses the impact of high inflation on company valuations.
Most firms can’t forecast impacts of ESG
A new global survey highlights the difficulty in quantifying the financial impacts of environmental, social, and governance (ESG) factors.
Competition keeps cost of capital platform prices down, experts believe
That’s the feeling of a panel of veteran valuation experts who presented at the recent Forensic and Valuation Conference hosted by the Virginia State Society of CPAs.
Inflation, volatility trigger increase in ERP, per Kroll
Kroll has increased its recommended U.S. equity risk premium (ERP) from 5.5% to 6.0% when developing USD-denominated discount rates as of Oct. 18, 2022.
Global BV News and Trends October 2022
Business valuation news from a global perspective.
BV News and Trends October 2022
A monthly roundup of key developments of interest to business valuation experts.
Another call to discard CAPM
“Unfortunately—and I write this with a heavy heart—the CAPM is not just imperfect; it is so badly wrong that it is best ignored,” writes Ivo Welch (UCLA Anderson Graduate School of Management) in an article “The Cost of Capital: If Not the CAPM, Then What?”
Some surprising takeaways from the VSCPA BV conference
The Virginia State Society of CPAs held its 22nd annual Forensic and Valuation Conference. Harold Martin (Keiter) chaired the two-day conference and acknowledged the help of a task force in putting the event together. The sessions and speakers were top-notch, and some of the takeaways from the first day’s sessions may surprise you.
Hitchner v. Damodaran on Inputs to the Cost of Capital
Jim Hitchner (Valuation Products and Services) responds to some severe criticisms Aswath Damodaran (New York University Stern School of Business) made during a BVR webinar about certain inputs to the cost of capital. Hitchner also offers some best practices and a handy tool to use as a reasonableness check on your cost of capital estimate.
BV News and Trends September 2022
A monthly roundup of key developments of interest to business valuation experts.
‘ESG Ratings: A Compass Without Direction’
That’s the title of a new paper out of the Stanford Graduate School of Business that examines the concerns over the reliability of the various ratings schemes for environmental, social, and governance (ESG) factors.
Nath comments on Hitchner v. Damodaran
The author of a number of seminal articles on control premiums, minority interest valuation issues, and cost of capital, Eric Nath (Eric Nath & Associates) comments on a recent article in Business Valuation Update.