Strong win for DOL in Vinoskey ESOP trial
Difficult times for the ESOP community.
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 ...
BVU News and Trends September 2019
A monthly roundup of key developments of interest to business valuation experts.
20- and 10-year spot yields on T-bonds favored for risk-free rate
Two-thirds of survey respondents say they use the spot yield on Treasury bonds for their risk-free rate when developing an estimate for the cost of capital, according to BVWire’s latest survey.
DOL Prevails on All Claims Against ESOP Trustee and Owner/Seller
Trial court finds ESOP trustee liable for causing plan to overpay for company stock; trustee failed to adequately respond to red flags in ESOP appraisal and did not act solely in the interest of ESOP, court says; owner is liable for accepting price he knew to be above stock’s fair market value.
Pizzella v. Vinoskey (I)
Trial court finds ESOP trustee liable for causing plan to overpay for company stock; trustee failed to adequately respond to red flags in ESOP appraisal and did not act solely in the interest of ESOP, court says; owner is liable for accepting price he knew to be above stock’s fair market value.
Early survey results on risk-free rates of choice
Preliminary results from our latest cost of capital survey reveal that the spot yield on the 20-year U.S. Treasury bond is most often used as the basis for the risk-free rate.
Part 2 of our cost of capital survey: risk-free rates
Please take part in the second in our series of short surveys to investigate how appraisers derive cost of capital in their valuations of private companies.
Is someone peeking at your cost of capital estimates?
If you use one of the new online tools that help you estimate the cost of capital, you may be worried about data security.
Interesting results from our cost of capital survey
A significant number of valuation experts look to the private capital markets when estimating the cost of capital for a private firm, according to a BVWire survey.
Should business valuators use ‘implied’ equity risk premiums? Damodaran says yes
The free, 11th annual update to ‘Equity Risk Premiums (ERP): Determinants, Estimation and Implications—The 2019 Edition’ is now available from Professor Aswath Damodaran (New York University Stern School of Business).
‘We’re killing ourselves!’ with cost of capital complexity
That was the cry of one attendee at the NACVA conference in Salt Lake City during a session titled “The Cost of Capital Conundrum.”
Reminder: Take our cost of capital survey
Our thanks to those of you who took the first in a series of short surveys to investigate how appraisers derive cost of capital in their valuations of private companies.
Damodaran posts 2019 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 2019 Edition.”
Participate in BVWire’s cost of capital surveys
BVWire is a conducting a series of short surveys to investigate how appraisers derive cost of capital in their valuations of private companies.
Industry betas now included in CCPro platform
Users of BVR’s new Cost of Capital Professional (CCPro) platform now have the choice of two sources of industry betas to help in estimating the industry risk premium (IRP) component of the buildup method for developing the cost of capital for a private company.
Two Articles Addressing Firm Quality and Its Impact on the Size Effect
The authors discuss two recent papers that present the concept of firms’ quality and show that it plays an important role in understanding the size effect. Also discussed are papers that present a differing view.
No End in Sight to Size Effect Debate
A look at several recent articles on the so-called size premium that perpetuate the debate on this topic. Some appraisers feel that the size effect has diminished or disappeared since it was first documented in 1981, while others feel it is alive and well.
BVU News and Trends May 2019
A monthly roundup of key developments of interest to business valuation experts.
D.C. Circuit Upholds Remainder-Interest Valuation in Weird Charitable Contribution Case
In charitable contribution case involving remainder interest, D.C. Circuit upholds Tax Court’s value-related findings, including that petitioner did not provide qualified appraisal and did not meet substantiation requirements; valuation here is to be based on FMV, not actuarial tables.
Blau v. Commissioner (RERI II)
In charitable contribution case involving remainder interest, D.C. Circuit upholds Tax Court’s value-related findings, including that petitioner did not provide qualified appraisal and did not meet substantiation requirements; valuation here is to be based on FMV, not actuarial tables.
Hayler proposes pretax ‘shorthand’ for some financial reporting valuations
Richard Hayler (Deloitte), fellow of the ICAEW, offers a ‘formula for finite life project cashflows’ that modifies earlier models to achieve ‘a more realistic assumption set.’
BVU News and Trends April 2019
A monthly roundup of key developments of interest to business valuation experts.
Latest paper on the vanishing size effect
A new academic paper, “Why Has the Size Effect Disappeared?,” explores the disappearance of the small-firm effect after the early 1980s.
Do you have a Rube Goldberg cost of capital process?
Wildly complicated gadgets designed to do very simple tasks was the specialty of Rube Goldberg, the Pulitzer Prize-winning cartoonist, sculptor, author, engineer, and inventor.