Rights of first referral restrict marketability
“Rights of first refusal (ROFRs) are not the same as buy-sell agreements,” explains Chris Mercer (Mercer Capital) on his blog Valuation Speak. “The bottom line about rights of first refusal is that they restrict marketability. Buy-sell agreements provide for marketability under specified terms and conditions upon the occurrence of specified trigger events.” Click here to [...]
The call to be the third appraiser can be problematic
Chris Mercer (Mercer Capital) posted this insight on his Valuation Speak blog this week: “Over the last several years, I’ve been involved in several multiple appraiser valuation processes as the third appraiser. These experiences provide the basis for a few ideas to ‘fix’ a process that is already underway and headed for almost certain trouble [...]
Have the last six months changed the business valuation profession?
John Paglia (Pepperdine University), Robert Slee (Robertson & Foley), and the Graziadio School of Business and Management at Pepperdine University just published the results of their ongoing Pepperdine Private Capital Markets Project, a research survey pertaining to privately-held companies and the markets in which they raise capital. BVWire is happy to offer the following snapshot of some [...]
Great posting on future-looking cost of capital from Rand Curtis
Here’s Rand’s posting on the IBA Blog.
You can’t be too thin…but you can have too large a size premium
Mike Crain is doing some interesting research on the size premium…or lack thereof. One conclusion he’s drawing is that the size premium has all but disappeared since 1981. This by itself is obviously a radical concept for appraisers who are used to taking on several hundred basis points for small stocks. Mike also makes a [...]
Divorce laws vary state-by-state, but valuation mistakes are often the same
Last Sunday at the AICPA National BV Conference, Nicholas San Filippo (Lowenstein Sandler PC) informed the audience that the legal standards in oppression cases and valuation cases not only vary across states but are different within each state for the type of entity involved. “The distinctions are important, so when you interface with counsel you [...]
Tax court judge says many Daubert challenges are without merit
“There may be situations where it’s fair to say the opposing witness is a liar and a cheat,” joked Judge Gustafson in the keynote panel at today’s Tax and Valuation Conference at Georgetown School of Law. ”But, those situations are rare.” As a result, he doesn’t see a lot of value in Daubert challenges or antagonistic cross-examination. Gustafson [...]
Valuations involving decedents who died in 2010 require special treatment
There is a new estate property transfer procedure for decedents who died in 2010, “Generally, for decedents who died in 2010, the transferee’s basis in the acquired property is the lessor of the decedent’s basis in the property or the fair market value of the property on the date of death,” says Robert F. Reilly [...]
Building a credible model in a lost profits case
“Quite often we’re assuming liability when we’re being asked to calculate lost profits,” James O’Brien and Robert Gray (Parente Beard) told listeners during the recent BVR webinar “Lost Profits Calculations: Methods & Procedures” —the first installment of BVR’s Webinar Series on Damages Essentials. The two experts listed four important factors when connecting causation and the [...]
Five concerns when valuing illiquid securities
Larry Levine (McGladrey) outlined the key valuation drivers for a fixed income security yesterday in his session “Valuing Illiquid Financial Securities” at the ASA/CICBV Business Valuation Conference. Forecast of coupon payment –fixed or floating rate Consider financial impact of embedded options: a. right to prepay, right to call b. right to convert into another security c. [...]
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