Valuing Enterprise Cash Flows
The integrated theory of business valuation provides a conceptual framework for disciplined analysis of valuation questions. Too often, valuation analysts are tempted to view individual components of a valuation assignment on a piecemeal basis. Adhering to the integrated theory helps valuation analysts develop base valuation conclusions, discounts, and premiums that are rooted in a shared perspective of the subject company and the subject ownership interest. In Part 1 of the series, Chris Mercer and Travis ...
New paper on IBOR reform and valuation
For many years, interbank-offered rates (IBORs) have set the benchmark rate for lending on an unsecured basis.
BVU News and Trends February 2021
A monthly roundup of key developments of interest to business valuation experts.
Damodaran updates cost of capital data
Professor Aswath Damodaran (New York University Stern School of Business) has started his annual posting of data updates on his website that include risk-free rates, equity risk premiums, corporate default spreads, corporate tax rates, country risk premiums, and other data—all of which is free.
YE2020 data are now in the Cost of Capital Professional
Year-end 2020 data, including equity risk premia, CRSP decile size premia, and industry betas/IRPs, are now available in BVR’s Cost of Capital Professional platform.
BVU News and Trends January 2021
A monthly roundup of key developments of interest to business valuation experts.
Vanguard stock market forecast implies a U.S. ERP of 3% to 5%
Annual returns of U.S. stocks over the next decade are forecasted to be in the “modest 3.7%-5.7% range,” according to a recent market outlook report from Vanguard.
Global BVU News and Trends December 2020
Business valuation news from a global perspective.
D&P reduces recommended U.S. ERP to 5.5%
Duff & Phelps has decreased its recommended U.S. equity risk premium (ERP) from 6.0% to 5.5% for use as of Dec. 9, 2020, according to a client alert.
Side Effect of COVID-19: Beta Changes Impacting Business Valuations
The COVID-19 pandemic is causing betas and other measures of risk commonly used in company valuations to appear to have changed. Beta is a critical component used by valuation experts when determining the discount rate in business valuation. Even small changes in betas can cause large changes in the discount rate and, consequently, can cause large changes in valuation. In this panel discussion, Dr. Roper and Cliff Ang, CFA, will describe how the COVID-19 pandemic ...
D&P enhances infographic on cost of capital
Duff & Phelps has updated its infographic, “Cost of Capital in the Current Environment,” and has enhanced it with new data on the eurozone.
BVU News and Trends October 2020
A monthly roundup of key developments of interest to business valuation experts.
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.
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?
The Market Price of Risk: Quantifying a COVID-19 Equity Risk Premium Using High-Yield Bond Pricing
The authors demonstrate how a high-yield option-adjusted spread is used when doing appraisals of private companies while considering the market volatility and economic slowdown caused by the COVID-19 pandemic.
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.
Valuing Residential and Commercial Construction Companies
Cash flow seasonality, bid requirements, license particulars, economic forces, and ubiquitous litigation are all hallmarks of the residential and commercial construction industries and all unique factors when appraising a construction company. Join What it’s Worth guide author and expert Pasquale Rafanelli for a full inspection of residential and commercial construction company valuation issues from accounting methods to value drivers. Avoid the common valuation mistakes that appraisers make and learn to answer the one question on ...
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.
EU risk-free rate declines, and the market risk premium increases to 9.0%
A special edition (fifth) of the “European Capital Market Study” from ValueTrust was released last week.
Duff & Phelps raises US ERP from 5.0% to 6.0% for 1Q valuation dates
D&P has increased its recommended U.S. equity risk premium (ERP) from 5.0% to 6.0% for use as of 25 March 2020.
D&P increases recommended U.S. ERP to 6.0%
Duff & Phelps has increased its recommended U.S. equity risk premium (ERP) from 5.0% to 6.0% for use as of March 25, 2020, according to a client alert.