Use of Benninga-Sarig to Estimate Debt Betas in a Valuation Engagement In the July 8, 2016 In re Appraisal of DFC Global Corp. Opinion (DFC Opinion), the Court of Chancery of the State of Delaware suggested that debt betas should be estimated for individual companies and it cited Pratt and Grabowski’s Cost of Capital as a source for debt betas based on the firm’s credit rating. In addition, the Court also adopted the Hamada Formula over the Fernandez Formula to unlever betas because it believed the Hamada Formula “is widely accepted, readily understood, and not subject to dispute about whether…
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Tips for Achieving Your Financial New Year’s Resolutions The odds are against people who make New Year’s resolutions, with research suggesting that less than half of resolutions will be kept six months later. Here are tips for following through on financial objectives, beginning with setting goals that are specific, measurable, and realistic. To read the full article in CNBC, click: How to Make Your Financial New Year’s Resolutions Stick.
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The vast majority of Americans report not feeling engaged on the job. Fortunately, if you know what to look for, you can find job satisfaction. To read the full article in The New York Times, click: In Choosing a Job, Focus on the Fun.
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Capital structure decisions have long-term consequences for shareholders. The purpose of this whitepaper is to equip directors and shareholders to contribute to capital structure decisions that promote the financial health and sustainability of the company. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Capital Structure in 30 Minutes. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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Stand Out and be Noticed! In this article, Dr. Frederiksen discusses 10 steps to create a “killer” website.
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Part I of II Everyone knows there is a stock market and cannot help but hear daily updates—whether they understand it or not. Here are some basic principles and terminology that can help clients better understand the stock market and their investment decisions.
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As the start of another tax season draws closer, practitioners would do well to review the new due diligence requirements for preparing returns that claim child tax credits and the American opportunity credit, Internal Revenue Service warnings to safeguard client data from cybercriminals and other important developments. To read the full article in Journal of Accountancy, click: Getting in Shape for Tax Season.
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Is Cybersecurity Preparedness Lacking Among Boards? Some company boards are failing to take the necessary steps to defend against cyberattacks, with one survey finding that only 19% of directors say their boards have a high level of understanding of the issue. Many states have data breach notification laws on the books, although such a provision has yet to pass at the federal level. To read the full article in Computerworld, click: Corporate Boards aren’t Prepared for Cyberattacks.
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The inauguration of a new POTUS is now behind us. Time, then, to add to the cacophony of pop-prognostications. This blog post will make broad observations regarding potential changes to select corporate tax and other pro-growth economic policies in hopes of teasing out inferences for inputs to a basic valuation framework. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Corporate Taxes, Other Pro-Growth Policies, and Business Value—A Brave New World? This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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An Expert Witness Tells All Martin H. Abo, CPA, ABV, CVA, CFF shares the story of a fraud engagement, where he was retained to analyze the business practices of FirstPlus Financial. Mr. Abo shares his experience getting the engagement and testifying in the racketeering case.
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Negotiating, Structuring, and Reaping the Reward The authors share their views on what business owners should consider doing in anticipation of selling their business. The authors also share structuring considerations to close the transaction and reap the reward.
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When Amy Sonstein, CPA, PFS, started her first job in financial planning 12 years ago, she was the only woman in her training group. Some progress has been made in the past decade, but many financial planning firms still don’t have a large number of female advisers on staff. In this blog post, Sonstein shares how a woman’s perspective can help firms provide better service and value to their clients. To read the full article in AICPA Insights, click: Keeping it in Perspective: A Woman’s Take on the Profession.
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Some American workers are worried about their financial security in retirement, according to a Transamerica survey. In this article, Todd Campbell looks at five common fears involving retirement and how they can be addressed. To read the full article in The Motley Fool, click: How to Address Common Concerns About Retirement.
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Sears has booked losses of over nine billion dollars during the past eight years. The company has had to resort to shedding assets—tangible and intangible—in a bid to right-size operations and manage liquidity. In January 2017, Sears announced the sale of its Craftsman brand to Stanley Black & Decker. Samantha Albert, senior financial analyst with Mercer Capital, explains the transaction. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Crafting a Deal in Order to Stay Afloat. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog,…
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Aligning Business Models and Business Practices A key factor in establishing a reasonable transfer price is establishing the business model used by sales and distribution organizations. In this article, the authors describe the three primary models and their relevance establishing and defending a transfer price.
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What do You Have to Lose? Since only a fraction of the cases filed go to trial, it seems prudent to explore settlement sooner rather than later. It is not rocket science, and statistics support the claim that the earlier a case settles the lower the expense to achieve that settlement. If this is not enough to encourage someone to consider mediation sooner rather than later, then perhaps recent court statistics will. Although the trend over the past few years has shown a decline in the total number of filings, the cost and length of time to resolution has increased.…
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Many advisers have plans for growth, but does anyone really know what causes above average sustained progress? After years of experience and study, Glenn Kautt, CFP, EA, AIFA, concluded that leading a firm requires you to have a detailed plan. To read the full article in Financial Planning, click: The Growth Plan: Keeping your Practice on Course.
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We’re quickly approaching the time of year when most contributions are made to IRAs and Roth IRAs. But there are limits to how much can be contributed to an IRA, and exceeding them can result in costly penalties. Ed Slott, CPA, tells us what to look out for. To read the full article in Financial Planning, click: A Tax Nightmare: Excess IRA Contributions.
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What risk assets are not near record valuations, aside from assets in a few sectors such as energy and retail? Investing when multiple expansion occurs over a holding period is a great thing, but multiples cannot expand forever; they also can contract. Jeff Davis, managing director of Mercer Capital’s Financial Institutions Group, explains. To read the full article in Mercer Capital’s Financial Reporting Blog, click: Gravity Matters, Especially for Financial Investors. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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Audit Risk and Use of Defined Value Clauses Estate planning attorneys and their clients are aware of the risk of an audit. Despite knowing this risk, they seek certainty. Business valuation is as much art, as it is science. Estate planning attorneys have devised techniques to hedge the aforementioned risk and provide their clients with a greater degree of certainty. One such technique utilized by estate planners is the use of Formula or Defined Value Clauses. The merit of defined value clauses seeks to mitigate audit risk, while providing the client with the certainty of knowing, at the date of…