Company-Specific Risk Is Not All That Specific
All firms face company-specific risks, many of which are somewhat similar across industries and companies. So is anything really company-specific? An alternative method eliminates the need to totally guess at the company-specific risk premium.
BV News and Trends May 2021
A monthly roundup of key developments of interest to business valuation experts.
Global BV News: Discrepancy in data breach data
Data breaches reported to the UK Financial Conduct Authority (FCA) dropped by 30% between 2019 and 2020, the regulator says.
BVU News and Trends April 2021
A monthly roundup of key developments of interest to business valuation experts.
Mercer addresses court acceptance of the QMDM for DLOM
During a recent BVR webinar, an audience member asked about the track record in court of the quantitative marketability discount model (QMDM) for determining a discount for lack of marketability (DLOM).
Today! Third and final part of ‘Integrated Theory’ webinar series
A very special BVR webinar series concludes today with the authors of Business Valuation: An Integrated Theory, Z. Christopher Mercer and Travis W. Harms (both with Mercer Capital).
Pepperdine private cost of capital survey is open
A BVWire poll found that 40% of respondents use the Pepperdine Private Capital Markets Reports for estimating small private-company cost of capital.
Reminder: Take the Pepperdine private cost of capital survey
The Pepperdine Private Capital Markets Project conducts an annual survey of expected rates of return with respect to private companies.
BVU News and Trends March 2021
A monthly roundup of key developments of interest to business valuation experts.
The NICE DLOM Method Gets a Few Shots in the Arm
The nonmarketable investment company evaluation (NICE) method, which first appeared in 2006, is included in leading valuation books but it has not gained much traction and had not appeared in any court cases—until now. Plus, a streamlined version of the model will be out soon, according to the method’s developer, William H. Frazier (W.H. Frazier & Co. Inc.).
Assessing Additional Economic Risk Due to COVID-19 (Update)
This is an update to a previously published template that can serve as a framework of thinking about the impact of the coronavirus on a subject company. The author presents a series of questions that help assess the short- and long-term risks with respect to the subject company’s industry, physical operations, financial issues and firm management.
Fair Market Value Opinions and Business Valuations for the Ambulance and EMS Industry: Help Is on the Way
The ambulance services system in the U.S. is a hodgepodge of private and public players. The private sector is highly fragmented with relatively few companies operating on a national or regional scale. Darcy Devine and Will Hamilton will focus on the opportunities and challenges for consolidators and investors in the ambulance arena, and teach what valuation methodologies work best for these companies and current market multiples for ambulance businesses. Despite their need for ambulance services ...
Mercer and Harms tie BV together into one neat bundle
Business valuation is like one huge jigsaw puzzle, and practitioners can often find themselves focusing too much on the individual pieces.
Data breaches threaten brand values, says study
A recent study from Infosys and Interbrand analyzes the maximum risk of brand value loss in case of data breaches.
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 ...
Valuing Small and Micro Businesses Using the Income Method
Focus in on valuing micro and small businesses using the income methods of business valuation. Learn to distinguish differing risk factors between large companies and micro and very small companies. Join Gregory Caruso for a deep dive into problematic areas of actual small-business valuation cases to review theory and tie it into the actual application of methods using best practices and professional judgment. Audience questions and succinct opinions welcomed in this hands-on event.
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.
Conceptual Overview of the Integrated Theory
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. This first webinar in the three-part series sets the stage ...
NICE DLOM method gets a nice boost
The nonmarketable investment company evaluation (NICE) method for estimating a discount for lack of marketability (DLOM) first appeared in 2006 and is included in leading valuation books.
Today! ‘Integrated Theory’ authors kick off webinar series
A very special BVR webinar series begins today with the authors of Business Valuation: An Integrated Theory, Z. Christopher Mercer and Travis W. Harms (both with Mercer Capital).
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.
Choose Your Client Wisely in a Bankruptcy Engagement
Robert Reilly (Willamette Management Associates) and Josh Shilts (Shilts CPA) conducted an informative session on valuations for bankruptcy at the AICPA FVS Conference.
New Research Paper Joins Call to ‘Let Go’ of the Size Premium
A look at the latest paper that joins mounting academic research over the recent past that shows that the size effect no longer exists—or was never there in the first place.