BV News and Trends March 2025
A monthly roundup of key developments of interest to business valuation experts.
Poll reveals methods and data sources for ERP
The Kroll Cost of Capital Navigator continues to be widely used and accepted for estimating cost of equity (COE), per the results of a poll during BVR’s recent Cost of Capital Virtual Conference.
Tomorrow! BVR’s Cost of Capital Virtual Conference
Tune in tomorrow, January 16, for BVR’s live virtual conference devoted to the cost of capital.
Next week: BVR’s Cost of Capital Virtual Conference
Mark down January 16 on your calendar for BVR’s live virtual conference devoted to the cost of capital.
Valuation Report Excerpts Using Pepperdine to Estimate a Discount Rate
Sample language adapted from actual valuation reports using information from Pepperdine’s “2024 Private Capital Markets Report” to estimate cost of capital for a small business, including an adjustment for company-specific risk.
BV News and Trends August 2024
A monthly roundup of key developments of interest to business valuation experts.
RESEARCH UPDATE: Monthly Recap of Research Papers July 2024
The featured paper is “Beyond Subjective Weights—Risk Aware Reporting of Valuation Results for a Privately Held Business” by Mikhail Munenzon (InteleK Business Valuation & Advisory). Other papers of interest to valuation experts cover topics including ERPs and risk-free rates, valuation of data assets, quantitative disclosures and risk, and the impact of founder-family succession on firm value.
Global BVU News and Trends July 2024
Business valuation news from a global perspective.
Kroll lowers recommended ERP to 5.0%
Kroll has decreased its recommended U.S. equity risk premium (ERP) from 5.5% to 5.0% when developing USD-denominated discount rates as of June 5, 2024.
BVU Cost of Capital Center adds more Pepperdine info
Starting with the August issue of Business Valuation Update, information on rates used in practice for company-specific risk, industry risk premia, and the size premium will be included in the monthly Cost of Capital Center.
New feature in Business Valuation Update spotlights research
To promote more of a connection between valuation practice and financial research, BVR’s monthly Business Valuation Update now includes a recap of research and scholarly papers that should be of interest to valuation experts.
BV News and Trends April 2024
A monthly roundup of key developments of interest to business valuation experts.
Review of Surveys on Cost of Capital Data Sources and Inputs
The Kroll Cost of Capital Navigator continues to be widely used and accepted for estimating cost of equity (COE). But BVR’s Cost of Capital Professional has been gaining considerable steam since its launch in 2018, according to a BVR survey. Some other resources for estimating the cost of capital have also seen an uptick in usage.
BV News and Trends March 2024
A monthly roundup of key developments of interest to business valuation experts.
Kroll-recommended ERP remains at 5.5%—for now
The latest cost of capital infographic from Kroll has the firm’s recommended U.S. equity risk premium reaffirmed at 5.5% when developing USD-denominated discount rates.
Lower ERP likely for 2024, predicts Kroll
One of the “pivotal” trends for 2024 is a likely drop in the equity risk premium (ERP), predicts Kroll in its list of “10 Trends Shaping 2024.”
Kroll conducts survey of cost of capital inputs
In the last issue, we presented results of several surveys on the various resources practitioners use for estimating cost of capital.
Update on Current Inputs for Valuations Amid High Inflation
Carla Nunes and Jim Harrington, both with Kroll, present two very helpful charts on long-term inflation expectations and projections for long-term real GDP growth. The charts include the sources for developing the estimates.
Practical Considerations in Normalizing the Risk-Free Rate
Some valuation firms and practitioners have advocated that the risk-free rate of return (Rf) should be normalized when it is believed to be too low because of Federal Reserve Bank policies. Recent arguments for doing so have been based on technical economic analyses but have ignored practical aspects of normalizing Rf. This article is intended to address those practical considerations.
BV News and Trends August 2023
A monthly roundup of key developments of interest to business valuation experts.
BV News and Trends June 2023
A monthly roundup of key developments of interest to business valuation experts.
Kroll lowers recommended ERP to 5.5%
Kroll has decreased its recommended U.S. equity risk premium (ERP) from 6.0% to 5.5% when developing USD-denominated discount rates as of June 8, 2023.
BVU News and Trends April 2023
A monthly roundup of key developments of interest to business valuation experts.
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.”
BV News and Trends March 2023
A monthly roundup of key developments of interest to business valuation experts.
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