BV News and Trends October 2022
A monthly roundup of key developments of interest to business valuation experts.
Another issue of the ASA’s journal added to BVResearch Pro
Every month, subscribers to the BVResearch Pro platform get access to new articles, books, court cases, webinar transcripts, and more that are added to the almost 20,000 pieces of content.
Another call to discard CAPM
“Unfortunately—and I write this with a heavy heart—the CAPM is not just imperfect; it is so badly wrong that it is best ignored,” writes Ivo Welch (UCLA Anderson Graduate School of Management) in an article “The Cost of Capital: If Not the CAPM, Then What?”
CFOs ignoring cyber risk despite huge losses
A Kroll report finds that 82% of the executives in its survey said their companies suffered a loss of 5% or more in their valuations following their largest cyber security incident in the previous 18 months.
BV News and Trends September 2022
A monthly roundup of key developments of interest to business valuation experts.
‘ESG Ratings: A Compass Without Direction’
That’s the title of a new paper out of the Stanford Graduate School of Business that examines the concerns over the reliability of the various ratings schemes for environmental, social, and governance (ESG) factors.
BV News and Trends August 2022
A monthly roundup of key developments of interest to business valuation experts.
Key Lesson to Be Learned From Valuing a Strip Club
A strip club may bare all, but not when it comes to every bit of information an analyst needs to do a valuation. The trick is knowing the right questions to ask to discover these hidden factors that may impact value, and that goes for other types of businesses as well.
2022 Pepperdine report on private cost of capital released
A preview of the “2022 Private Capital Markets Report” was presented at the NACVA’s Business Valuation & Financial Litigation Super Conference last week.
Put ESG impact in numerator, not denominator
Currently, there is no empirical evidence to support including the impact of environment, social, and governance (ESG) factors in the cost of capital, so it should be reflected in the cash flows.
BV News and Trends July 2022
A monthly roundup of key developments of interest to business valuation experts.
Valuing Nightclubs, Bars, and Adult Cabarets
That’s the title of the latest installment in BVR’s What It’s Worth series of industry-specific valuation guides.
Feedback wanted on ‘social value’
The Social Value Working Group at the International Valuation Standards Council has released its second paper in a series that examines whether “social value” can be a basis of value, the difference between social value and the social component of ESG, and whether the existing valuation principle of highest and best use can apply to social assets and social value.
Trugman’s Approach to Assessing Company-Specific Risk
This is an excerpt from the new sixth edition of Understanding Business Valuation, which has a companion website that includes a good selection of full sample valuation reports and other supporting material.
BV News and Trends June 2022
A monthly roundup of key developments of interest to business valuation experts.
Global BV News and Trends June 2022
Business valuation news from a global perspective.
Comment on COE data sources survey
In last week’s issue, we reported on a survey of the data sources analysts use to estimate the cost of equity (COE) (click here to see the news item).
Hitchner surveys COE data sources of choice
The Kroll (formerly Duff & Phelps) Navigator has been the consistent clear choice for cost of equity (COE) data by valuation analysts, according to ongoing surveys by Jim Hitchner (Valuation Products and Services).
BV News and Trends May 2022
A monthly roundup of key developments of interest to business valuation experts.
Hitchner examines the Pepperdine survey
BVR has long been a supporter of the Pepperdine University Capital Markets Project, which conducts an annual survey of expected rates of return with respect to private companies.
BV News and Trends April 2022
A monthly roundup of key developments of interest to business valuation experts.
Kroll increases U.S. normalized risk-free rate to 3.0%
Kroll has increased its recommended normalized risk-free rate to 3.0% from 2.5%, effective April 7.
Holy cow! New York Yankees hit $6 billion in value
That’s what the legendary announcer Phil Rizzuto would be yelling over this news.
Global BV News: Eurozone ERP, risk-free rates unchanged: Kroll
Kroll has left unchanged (until further notice) its recommended German normalized risk-free rate of 1.5% and its current eurozone equity risk premium range of 5.5% to 6.0% (from a German investor’s perspective).
Twitter poll on the size effect
Wes Gray, a Ph.D., financial analyst, and CEO of Alpha Architect, recently conducted a poll on Twitter about the size effect (implicit in traded stocks where returns can be observed).