Damodaran invites you to the ‘dark side’ of DCF valuations
Aswath Damodaran, Professor of Finance at the NYU Stern School of Business, is teaching one class this year—valuation—and you are invited to attend. In a recent blog post, the Professor explains how you can sign up, access lecture notes, watch webcasts, get emails, and even take quizzes and exams. An excerpt from his summary: While the [...]
Scenario modeling may help start-up company valuations
Earlier BVWire pointed to a Business Valuation and Advisory Network LinkedIn discussion that pulled over 40 comments responding to an inquiry of how to discount negative cash flows in the early years of an early-stage company. The Valuation Group on LinkedIn simultaneously generated a timely discussion about valuing a start-up with a new patent. Noreen Dornenburg suggested [...]
BVR special report on using management projections in valuation available now
Forecasts and projections are keys to determining a company’s value, but when was the last time you simply plugged what you received from management without adjustments? But what standard of care should you use, and how hard should you battle to normalize your own DCF analyses? In Using Management Projections for Valuations, BVR delivers meaningful [...]
DE Chancery expands on Hanover, and recommend alternative methods to DCF
The Delaware Chancery Court recommended in the In re Hanover case to use more than one valuation methodology (see BVWire #98-1) Well, now a new “entire fairness” decision expands on Hanover. Even if the DCF is a commonly accepted and perhaps even “generally preferred” valuation methodology, the DE Chancery said, (in an opinion written by Vice [...]
DCF (plus tax-affecting) is more appropriate for partnership valuation than cap/earnings approach, says post-Bernier court
Back in 2007, the Bernier decision by the Supreme Judicial Court of Massachusetts was among the first to analyze the “bedeviling” issue of tax-affecting the income stream of a closely held corporation in divorce. (See BVWire #60-2) Recently—the same panel delivered an expedited opinion concerning the present value a husband’s interest in a highly lucrative hedge fund partnership. [...]
Damodaran: Agree to disagree about the usefulness of CAPM betas
Aswath Damodaran (NYU Stern School of Business) just completed his series on “Alternatives to the CAPM: Wrapping Up.” “Find your own way of adjusting for risk in valuation but refine it and question it constantly,” the professor advises.
Can the income approach get you in trouble for early stage pharma valuations?
“The Valuation Of Drug Development Projects—Part 1” by Sangeeta Puran (Mayer Brown International) addresses valuation theory as it relates to drug discovery and research. It’s the Licensing Executives Society International (LESI) article of the month. Says Puran: “The purpose and scenario for which a valuation exercise is undertaken, and by whom it is undertaken, ultimately explains the [...]
Duff & Phelps’ Grabowski and Harrington quoted on financial impact of the turmoil in Cairo
Roger Grabowski and Jim Harrington were featured this morning by CFO.com, as lead analysts on the loss of value in Egypt as the country faces new political change. Roger points out how exposed investment capital is, in particular, in the CFO.com analysis: “Buying a company, expanding a plant, adding new product lines — capital expenditures [...]
IVSC reviews discounted cash flow valuation method
The International Valuation Standards Council (IVSC) just issued Technical Information Paper on the Discounted Cash Flow Method for Real Property and Business Valuations. This exposure draft appeals for public comment on debates such as: The DCF method should not be judged on the basis of whether or not the explicit cash flow assumptions are ultimately [...]
Direct from DE Chancery: Use more than one valuation method
Like so many of the statutory appraisal/entire fairness cases in the Delaware Chancery Court, In re Hanover Direct, Inc. Shareholders Litigation (Sept. 24, 2010) came down to a “battle of experts,” writes Chancellor Chandler in a recent letter opinion. “Unlike most of these cases, however, this decision turns entirely on the fact that one expert’s [...]
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