Global BVU News and Trends October 2020
Business valuation news from a global perspective.
Free webinar to unveil new Control Premium Study platform
Mark your calendar for November 5 for the very first look at BVR’s new Control Premium Study platform.
Which business characteristic guarantees a premium value?
Business valuation experts in the UK often find little benefit from the academic literature about portfolio and investment theory.
Control Discounts and Premiums - What is Old and What is New
Where do they come from? Do they even exist? Should I fear using them? No, this October event doesn’t delve into the supernatural but rather attempts to demystify the methods and resources available to quantify control discounts and/or premiums. Join Jim Ewart and Jim Alerding to learn what is new, what is old, and what matters. Learn the sources, context, and usefulness of control premiums and discounts, and the best practices for determining what they ...
ASA, supporting Vinoskey ESOP appeal, aims to correct BV ‘misstatements’
The ASA recently filed an amicus brief in support of the Vinoskey appeal, in which it claims the district court, in ruling against the ESOP trustee and the owner and selling shareholder, Adam Vinoskey, made numerous valuation-related misstatements that required correction.
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.
What’s the current UK market risk premium?
Finding—and supporting—a precise cost of capital for UK valuations presents many challenges, but a thoughtful analyses by Reuters at least provides some context.
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?
What’s control worth in the UK? A current example
Sources such as BVR/FactSet’s Control Premium Study (CPS) often support price premia above 25% as the assumed benefit of a controlling interest.
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.
Fair Value Measurements Amid the Covid-19 Crisis
Reporting entities in recent years generally benefited from a growing economy, which may have allowed auditors to gain comfort with fair value measurements for financial reporting purposes with relatively less documentation. The disruption to global economic activity and financial markets suggest that a business as usual approach may no longer apply to these same fair value measurements. Consequently, reporting entities can expect fair value measurements to receive greater scrutiny from their auditors and a heighted ...
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.
Class-Action Litigation Involving ERISA/ESOP Valuation Issues
Join James F. Joyner and attorney Richard Pearl for unique insight into ESOPs and valuation principles. The general trend in ESOP transactions and valuation has been to acquiesce to fundamental changes because of the threat of litigation, even though ERISA or valuation principles do not require changes. Many defendants have been unable to adequately educate courts on some key issues. Get both the valuation and attorney perspective on how to address these issues.
BVR/FactSet Control Premium Study updated for first quarter
The 1Q 2020 Control Premium Study report is now available, and we have updated the online FactSet Mergerstat/BVR Control Premium Study platform to include the latest analyses.
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.
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 ...
The Balance Sheet and its Correlation to Company Specific Risk
The pandemic is teaching us that businesses, small and large, and their balance sheets are important not just from handling a pandemic, but also from sustaining operations. Understanding assets, and which matter, will help analysts determine the specific company risks. Expert Josh Shilts discusses which categories are important in understanding risk and what ratios and other analyses can be used to measure risk. Identifying and linking balance sheet financials to company-specific risk is a critical ...
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.