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.
Recent Cases from the Delaware Chancery: What Appraisers Need to Know Now
Join Bill Kennedy for a summary of key valuation issues ruled on by the Delaware Chancery and Delaware Supreme Court. Get coverage of recent cases and discover trends seen in the courts. Learn how the courts have treated the different valuation methods in recent cases, as well as factors to consider when applying the methods. No matter where you practice, the takeaways from this session will help valuation professionals deliver a quality, litigation-ready report.
The most common error in DCF analyses? Following the recipe.
Pablo Fernandez, the professor of finance at IESE Business School, remains one of the most thoughtful observers of business valuation practices.
Will the ‘Boris Bounce’ increase the value of small and medium-sized enterprises?
In theory, clarification and stabilisation make markets happy, so the current road map to exit should encourage investors.
Pablo Fernandez on common errors using WACC
A new paper presents a real valuation a well-known investment bank performed using two usual methods that are supposed to provide the same value.
KPMG Germany offers updated cost of capital study—and database of IFRS impairment test WACC results
KPMG Germany collected WACC results from 312 companies in Germany, Austria, and Switzerland for its 14th edition of the ‘Cost of Capital Study,’ concluding that the average WACC across industries remains at 6.9%.
Global BV News: KPMG Germany releases 2019 cost of capital study
Subtitled “The Calm Before the Storm—Rising Profits and Deflated Values?” the 14th edition of the Cost of Capital Study from KPMG Germany examines, among other things, the impact of regulatory interventions, scarcity of resources as well as digitalization on business models, their performance (cash flows) and their risk (cost of capital) by industry sector.
In re Appraisal of Jarden Corp. (II)
Responding to petitioners’ motion for reargument, court concedes and corrects errors in court’s original DCF analysis but finds corrected DCF model still corroborates the original fair value determination; court affirms its reliance on unaffected market price as fair value indicator.
Court Says Corrected DCF Still Supports Original Fair Value Determination
Responding to petitioners’ motion for reargument, court concedes and corrects errors in court’s original DCF analysis but finds corrected DCF model still corroborates the original fair value determination; court affirms its reliance on unaffected market price as fair value indicator.
Survey: Most appraisers look backwards for ERPs
The historical approach (ex post) is the preferred approach in estimating the equity risk premium (ERP), according to 76% of respondents to our latest survey.
Cost of capital platforms topline Virginia conference September 19-20
BVWire will be heading to Glen Allen, Va., for the Business Valuation, Fraud & Litigation Services Conference on September 19-20, sponsored by the Virginia Society of CPAs.
Ex post approach for ERP favored in early survey results
Our latest minisurvey on the cost of capital reveals that the historical approach (ex post) is the preferred approach in estimating the equity risk premium (ERP), cited by 75% of respondents.
Which ERP camp are you in? Please take our survey.
When you drive your car, should you look through your windshield or the rearview mirror?
BVU News and Trends September 2019
A monthly roundup of key developments of interest to business valuation experts.
Do UK business valuators struggle to explain themselves? Perhaps it’s because of ‘18 topics badly explained by many finance professors’
The confusion resulting from many finance practices isn’t your fault, says Pablo Fernandez (professor of finance, IESE Business School in Madrid) in a new and highly readable essay.
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.
In re Appraisal of Jarden Corp. (I)
Court finds record shows unaffected market price is best evidence of fair value; court says company expert’s efficient market analysis and event study provide strong support for use of market price; court’s own DCF analysis generates value close to market price, thus corroborating market price.
Court of Chancery Rules Unaffected Market Price Is Best Evidence of Fair Value
Court finds record shows unaffected market price is best evidence of fair value; court says company expert’s efficient market analysis and event study provide strong support for use of market price; court’s own DCF analysis generates value close to market price, thus corroborating market price.
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).
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.”
Business Valuation OIV Journal Spring 2019
Business Valuation OIV Journal has been created by Organismo Italiano di Valutazione (OIV), the Italian Valuation Standard Setter, to provide a forum for discussion and to foster cultural progress in the field of business valuation. In this issue, articles include "Company Valuation as Result of Risk Analysis: Replication Approach as an Alternative to the CAPM"; "Residual Income Model and Abnormal Returns: A Comparison to Factor Styles and Sell-Side Analysts"; and "Critical Issues When Valuating Small Businesses".
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