{"title":"Implied Control Premiums through Delaware Appraisal Decisions","authors":"Joseph Thompson, Paul Skluzak","doi":"10.5791/0882-2875-42.1.2","DOIUrl":"https://doi.org/10.5791/0882-2875-42.1.2","url":null,"abstract":"The valuation industry has utilized the concepts of control premiums and corresponding discounts for lack of control (DLOC) for decades. There has been considerable debate regarding the application of control premiums paid to acquire public companies, given the likely existence of synergies embedded within those premiums. This article analyzes implied control premiums using Delaware Court of Chancery (the “Court”) decisions in which the Court determined the fair value of the shares of formerly public companies. While this article is not intended to endorse the use of adjusted acquisition premiums when calculating a control premium or DLOC, it provides empirical support for the concept that acquisition premiums likely include synergistic elements and that an appraiser should consider downward adjustments for this issue.","PeriodicalId":138737,"journal":{"name":"Business Valuation Review","volume":"206 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114971779","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"From the Chair","authors":"Erin D. Hollis","doi":"10.5791/0882-2875-42.1.19","DOIUrl":"https://doi.org/10.5791/0882-2875-42.1.19","url":null,"abstract":"Thank you for being a subscriber of the Business Valuation Review (BVR). This long-standing publication of the American Society of Appraisers has been in existence since Spring 1982 and was previously titled Business Valuation News until 1985. It has historically been published four times a year and is a journal of diverse valuation topics that range from the traditional to the controversial to the very esoteric. Authors are typically esteemed practitioners or academics.Over the past ten years or so, we at the ASA have struggled with the idea of continuing BVR in its traditional print publication or permanently move to an online-only electronic format or continue the hybrid formula we currently utilize of print and online. A handful of years ago, to keep current with the times, we moved to strictly electronic delivery of the publication. However, member feedback led us to revert back to print while keeping our online edition.But where do we go from here? Should we maintain the publication in print? Should the format retain its academic and clinical stature? Or do we mix things up and possibly change the publication to something more commercial and general?ASA surveyed the membership for their feedback toward the end of 2022. The results of that survey have led us to put together a task force to make decisions on our publication. The task force will be charged with the following:Eventually all things in life need a tune-up or perhaps an entire transformation. Going forward, we at the ASA want what is best for our members and the readers of BVR. If you have any feedback or suggestions, please email me at erin@erin-hollis.com. I believe BVR is ASA's legacy to the business valuation industry. It's not an easy read and it's not for everyone, but it's a tradition our business valuation members are proud of.","PeriodicalId":138737,"journal":{"name":"Business Valuation Review","volume":"223 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135424270","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"From the Editor","authors":"Kyle S. Garcia","doi":"10.5791/0882-2875-42.1.1","DOIUrl":"https://doi.org/10.5791/0882-2875-42.1.1","url":null,"abstract":"I hope this issue finds you all well.First, a few updates.The American Society of Appraisers has posted on its website updates to Valuing a Business, 6th edition, the current edition of Shannon Pratt's original primer on business valuation and one of the world's most respected valuation references. The updates posted include the following:The ASA announced it will be providing periodic updates to the resources and appendix to VAB6; the appendix and future updates are available at https://www.appraisers.org/shop/publications-and-subscriptions/books/valuing-a-business/appendix.Also, data on the Implied Private Company Pricing Line (IPCPL) are no longer being updated on the BVResources.com web site. The Business Valuation Review released the first article by Bob Dohmeyer and Peter Butler on the Implied Private Company Pricing Line in 2012, and subsequent articles were published on the topic in the Business Valuation Review and Business Valuation Update. Business Valuation Resources provided data for business valuation professionals to employ the IPCPL, which until recently was available at BVResources.com and was accessible through their cost-of-capital center. This information is no long being updated, but the old resources are still accessible through BVResources.com.In this issue, Joseph Thompsom and Paul Skluzak explore control premiums using decisions from the Delaware Court of Chancery. Also, Barry Cunningham provides some insights as to a real estate appraiser's consideration of property rights as well as the impact of this on the valuation of intangible assets. And, last but not least, Erin Hollis provides a current business valuation case law update. Thanks to all of our authors for sharing their insights.As always, we invite our readers to submit articles on new or interesting content, such as case law updates such as that provided by Erin, practical tips like those provided by Barry, or general observations. Feel free to e-mail me (kgarcia@finresearch.com) any thoughts for articles or letters you may have, and I will be happy to discuss those with you.Please enjoy this issue.","PeriodicalId":138737,"journal":{"name":"Business Valuation Review","volume":"100 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"135424269","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Property Rights and the Real Estate Appraiser","authors":"Barry J. Cunningham","doi":"10.5791/0882-2875-42.1.11","DOIUrl":"https://doi.org/10.5791/0882-2875-42.1.11","url":null,"abstract":"This article provides the business appraiser with a better understanding of how real estate appraisers think about property rights and the distinctions they make between fee simple and leased fee estates. It also discusses two areas where a property rights issue could lead to understating intangible assets in real estate centric entities. Two brief case studies are used to demonstrate where problems can arise and how to resolve them. This is a primer to foster more in-depth discussion in future papers from the appraisal community.","PeriodicalId":138737,"journal":{"name":"Business Valuation Review","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2023-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122562014","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Is Expected Inflation the Best Long-term Sustainable Growth Rate?","authors":"Gene A. Trevino","doi":"10.5791/bvr-d-22-00010","DOIUrl":"https://doi.org/10.5791/bvr-d-22-00010","url":null,"abstract":"When using the income approach to value a business, selecting a sustainable long-term growth rate is a necessary input into the valuation model, one that can have a material effect on the value of the business. The business valuation literature has provided little guidance for estimating and understanding sustainable long-term growth rates. Apart from relying on macroeconomic indicators and historical industry averages, appraisers have few options for selecting sustainable long-term growth rates and are often relegated to making arbitrary assumptions. The objective of this article is to examine the accuracy of using historical industry average growth rates, historical average gross domestic product growth rates, and expected inflation as sustainable long-term growth rates. The accuracy of the forecasts was examined vis-à-vis actual growth rates for twenty-one selected industries from 1991 to 2021 for the purpose of selecting the most accurate forecasting method. The forecasts premised on expected inflation proved to be the most accurate. In light of the results, the notion that expected inflation may be the best estimate of sustainable long-term growth was explored.","PeriodicalId":138737,"journal":{"name":"Business Valuation Review","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128187286","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Adjusting Tech Company Financial Statements When Applying the Value Driver Formula","authors":"David Neuzil, Joseph Thompson","doi":"10.5791/bvr-d-22-00006","DOIUrl":"https://doi.org/10.5791/bvr-d-22-00006","url":null,"abstract":"This article follows the authors' article in Business Valuation Review (November 2020) that explored typical errors when capitalizing cash flows in the terminal period of the Discounted Cash Flow Method. Since investments related to intangible assets are often expensed immediately through the income statement under generally accepted accounting principles, the article demonstrated that without significant adjustment, the value driver formula would likely overstate the net reinvestment into fixed assets and working capital when calculating the terminal value and understate the value of the company. This article provides examples of the types of adjustments necessary to calculate an economically internally consistent terminal value when applying the value driver formula to a subject company that derives significant value from intangible assets. This article also provides an example analysis using a real-world transaction to illustrate the necessary adjustments to expensed investments (e.g., research and development) when applying the value driver formula to Oracle's acquisition of NetSuite.","PeriodicalId":138737,"journal":{"name":"Business Valuation Review","volume":"25 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130601339","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Unlocking the Value of ESG: Report from the International Valuation Standard Council","authors":"A. Aronsohn","doi":"10.5791/2163-8330-41.3.107","DOIUrl":"https://doi.org/10.5791/2163-8330-41.3.107","url":null,"abstract":"This report provides an overview of the work carried out by the International Valuation Standard Council (IVSC) over the past two years in relation to unlocking the value of environmental, social, and governance (ESG) criteria within the valuation process, including a summary of the recently published IVSC ESG perspectives papers and internally generated intangibles. The report also illustrates some key findings from the IVSC ESG survey for firms, investors, and valuation providers and advises when more explicit ESG-related valuation standards will be contained in international valuation standards.","PeriodicalId":138737,"journal":{"name":"Business Valuation Review","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134636785","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Long-run Growth Rates in Discounted Cash Flow Models","authors":"Bradford Cornell, Richard Gerger","doi":"10.5791/bvr-d-22-00008","DOIUrl":"https://doi.org/10.5791/bvr-d-22-00008","url":null,"abstract":"Long-run growth rates play a central role in all discounted cash flow models. This is true whether the goal is to estimate the value of a company or to estimate the cost of equity. It is well recognized as a matter of mathematics—although not always incorporated into practice—that the long-run expected growth rate cannot exceed the growth rate of the aggregate economy. What is less widely appreciated is that as an empirical matter the long-run growth rates for existing companies (that is, companies that are being appraised or whose cost of equity is being estimated) are almost certain to be less than the growth rate of the aggregate economy. Based on analysis of net dilution from 1926 to 2017, a more reasonable approximation for the average long-run growth of existing companies is approximately two percentage points less than the expected nominal growth rate of GDP.","PeriodicalId":138737,"journal":{"name":"Business Valuation Review","volume":"35 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126071572","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
求助内容：
应助结果提醒方式：
京公网安备 11010802042870号
