Article says the size effect didn’t vanish—it never existed
The hits keep coming to the existence of the size effect.
Defendant in Vinoskey ESOP case files appeal with 4th Circuit
In the contentious Vinoskey ESOP case, one of the defendants, the owner and selling shareholder, Adam Vinoskey, recently appealed the district court’s finding that he was liable for knowingly participating in the trustee defendant’s ERISA violations and was a co-fiduciary for the trustee’s breaches of fiduciary duties.
Precision Kidd Acquisition, LLC v. Pass
In merger-related damages case, court upholds damages based on profits lost from key client’s termination of supply agreement with seller company; trial court properly rejected buyer expert’s DCF-based loss analysis which, among other flaws, overstated value of lost contract to seller company.
Proper Damages Measure Is Lost Profits Calculation, Not DCF-Based Loss Analysis
In merger-related damages case, court upholds damages based on profits lost from key client’s termination of supply agreement with seller company; trial court properly rejected buyer expert’s DCF-based loss analysis which, among other flaws, overstated value of lost contract to seller company.
BVU News and Trends September 2020
A monthly roundup of key developments of interest to business valuation experts.
Global BVU News and Trends September 2020
Business valuation news from a global perspective.
Latest paper in the size-effect debate
Some appraisers believe that the size effect has diminished or disappeared since it was first documented in 1981.
Global BV News: New module added to Duff & Phelps Cost of Capital Navigator
A new international industry benchmarking module will be available in late October for the Duff & Phelps Cost of Capital Navigator.
Duff & Phelps Cost of Capital Navigator adds international industry benchmarking module
The new international industry benchmarking module (available in late October) provides subscribers with comprehensive global industry-level statistics for approximately 90 industries in four global regions, with data to support valuation dates from March 2015 to the present.
D&P offers infographic on cost of capital amid COVID-19
Which financial market and economic indicators did Duff & Phelps take into consideration when it arrives at its recommended U.S. equity risk premium and accompanying normalized risk-free rate?
In a crunch, court adopts company’s DCF model as fair value indicator
In a statutory appraisal action prompted by the 2016 buyout of minority shareholders by the controller of a private company, the Delaware Court of Chancery recently found there was no meaningful market-based evidence of fair value and neither expert opinion, based on standard valuation methods, was “wholly reliable.”
Deviations From Historical Cash Flow and Their Implications to Effective Discount Rates for Lost Profits Analyses
The authors address the direct relationship between projected cash flows (that is, those being measured for risk) and discount rates in a lost profits analysis.
BVU News and Trends July 2020
A monthly roundup of key developments of interest to business valuation experts.
D&P lowers U.S. normalized risk-free rate to 2.5%
Duff & Phelps has decreased its recommended U.S. normalized risk-free rate from 3.0% to 2.5% for use as of June 30, 2020, according to a client alert.
Using a size premium could trigger Daubert trouble, says new article
Adding a size premium to the cost of equity could make an expert’s testimony subject to a Daubert challenge, says Clifford Ang (Compass Lexicon) in a recent article.
Kruse v. Synapse Wireless, Inc.
In appraisal action arising out of controller’s buyout of minority stockholders, court finds there is no reliable market evidence as to target’s fair value on merger date; none of expert valuations are “wholly reliable,” but one expert’s DCF analysis offers a “proportionately reliable conclusion.”
Lacking Any Wholly Reliable Indicators of Fair Value, Court Adopts Respondent's DCF Model
In appraisal action arising out of controller's buyout of minority stockholders, court finds there is no reliable market evidence as to target's fair value on merger date; none of expert valuations are "wholly reliable," but one expert's DCF analysis offers a "proportionately reliable conclusion."
Biton v. Kreinis
In dispute over fair value of plaintiff’s shares, court agrees with parties’ experts on use of capitalization of earnings method to value company; court rejects defense expert’s use of QuickBooks data and post-valuation-date revenue as representative annual revenue; applies key-person discount.
In Fair Value Determination, Court Says SSVS Discourages Use of Post-Valuation-Date Data
In dispute over fair value of plaintiff’s shares, court agrees with parties’ experts on use of capitalization of earnings method to value company; court rejects defense expert’s use of QuickBooks data and post-valuation-date revenue as representative annual revenue; applies key-person discount.
Company-specific risk webinar gets help from BVResearch Pro
During a recent webinar, it was noted that there are various models for estimating company-specific risk, such as Trugman, Black/Green, Warren Miller, and Butler/Pinkerton.
More concern about the validity of the size premium factor
Most business valuers consider a size premium when calculating cost of capital for financial reporting purposes.
Healthcare Valuation Townhall: Four Expert Panel on Covid-19 Impacts and Beyond
Bring your questions as leading experts Jerry Chang, Mark Deitrich, James Lloyd and Todd Sorensen have a conversation about the critical issues impacting healthcare. Covid-19 has impacted the healthcare industry in unique ways, and those valuation experts who practice in this high regulation environment know it is critical to keep up to date about the most pressing issues. Covering a wide range of issues from four perspectives this event delivers the insight you need in ...
New business valuation resource from Professor Fernandez captures low market returns
Pablo Fernandez continues to release research that may assist UK business valuers working on reports with valuation dates in Q1 2020.
BVU News and Trends May 2020
A monthly roundup of key developments of interest to business valuation experts.
Should you consider a special COVID-19 premium?
During a recent webinar, a question came up as to whether or not valuation analysts should be separately identifying a risk rate associated with the impact of COVID-19 on a subject company.