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.
BVU News and Trends March 2020
A monthly roundup of key developments of interest to business valuation experts.
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.
BVR Briefing – Cybersecurity in Business Valuation: Addressing the Impact of Data Breaches on Value
March 2020 PDF (37 pages)
Business Valuation Resources, LLC
Emerging Issues in Cannabis and Hemp/CBD: Buckle Up as it is Just Getting Interesting!
Talk about a growing industry. As legalization spreads across the country, more valuation professionals are focusing on emerging and evolving issues in cannabis and hemp. If you are a practitioner or an advisor who is involved in the appraisal and analysis of business interests in both the legal, regulated cannabis sector and in agricultural hemp and cannabinoids, then don’t pass on this webinar. Recent developments in state and federal legislation will be covered as will ...
Valuation underpinning contested stock sale reflects fair value, Court of Chancery says
In a breach of fiduciary duty action arising out of a controversial stock sale, the Delaware Court of Chancery dismissed the plaintiff’s attacks on the underlying valuation, noting the appraiser was “exceptionally knowledgeable about the industry” and held “informed beliefs” as to the company’s specific structure.
Two new resources for 2020 UK ERP, risk-free rate, and other indicators
Pablo Fernandez, professor of finance at the IESE Business School, is surveying business valuation professionals in the UK to determine what cost of equity assumptions they are using for 2020.
Assessing Cybersecurity Risk When Doing a Business Valuation
Don’t fall into the trap of thinking that just large firms face material risks related to data security and privacy concerns. Here’s a checklist for the guidance of valuation professionals to help assess these risks when performing a business valuation.
Current BUM and CAPM cost of capital rates now available from BVR’s Cost of Capital Pro
Year-end 2019 data are now available in BVR’s Cost of Capital Professional.
YE2019 data are now in the Cost of Capital Professional
Year-end 2019 data, including risk-free rates, industry risk premia, equity risk premia, and size premia, are now available in BVR’s Cost of Capital Professional platform.
BVU News and Trends January 2020
A monthly roundup of key developments of interest to business valuation experts.
Global BVU News and Trends January 2020
Business valuation news from a global perspective.
Implied ERP at 5.2% per Damodaran’s data update
Professor Aswath Damodaran (New York University Stern School of Business) has done 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.
Business Valuation OIV Journal Fall 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 "Roundtable: 10 Big Issues in Business Valuation"; "The Limits of Accounting Rates of Return and the Calibration Trap in Applying Accounting-Based Models in Modern Business Valuation Practice"; and "Connecting Economic Value to Company Strategy: Critical Issues and New Perspectives."
Coster v. UIP Companies, Inc.
In breach of fiduciary duty action, court says stock sale passes enhanced fairness review; appraiser valuing real estate investment services company before sale is eminently qualified and knowledgeable about industry; capitalized cash flow method “generated a reliable indicator” of company’s value.
Valuation Underlying Controversial Stock Sale Satisfies Highest Scrutiny
In breach of fiduciary duty action, court says stock sale passes enhanced fairness review; appraiser valuing real estate investment services company before sale is eminently qualified and knowledgeable about industry; capitalized cash flow method “generated a reliable indicator” of company’s value.
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%.
Spend more time on the numerator, expert panel advises
Attendees at a recent online workshop were urged to spend more time on the numerator (forecasts) of the valuation equation rather than the denominator (cost of capital).
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.
BVR and Duff & Phelps Cost of Capital Platforms Go Head-to-Head at VSCPA
Both platforms give similar results when estimating the cost of capital for private firms. They were put through their paces at a recent conference presented by the Virginia Society of CPAs.
A simple look at betas—and other inputs to the income approach
When estimating a company’s cost of equity, we all know investors adjust for varying levels of risk.
Do alliances and partnerships increase value?
Most business valuation experts accept the fact that business partnerships (for IP or shared revenue opportunities) add to the value of a pool of assets.