• Litigation Consulting - QuickRead Top Story - Valuation/Appraisal

    Is the Risk-Free Rate Really Risk Free?

    February 18, 2026

    Deconstructing the Idea of the Risk-Free Rate To evaluate future risk factors, analysts should understand the composition of the risk-free rate and consider the data influencing U.S. Treasury Bond yields. This article analyzes the criteria for evaluating the risk-free rate for use in engagements involving business valuations and economic damages. The general notion of a “risk-free rate” is the return available as of the valuation date on a security that the market generally regards as free of the risk of default.[1] U.S. Treasuries have fit this profile for decades, providing minimum, safe alternatives for risk-averse investors. They also provide a…

  • QuickRead Top Story - Valuation/Appraisal

    The Meritocracy of an Unregulated Market

    June 5, 2024

    Is There a Need to Broaden Regulation? Can humans achieve economic market efficiency without the “visible hand” or is the collateral damage of decisions an unfortunate reality in exchange for the freedom of unregulated markets. This article discusses the role of regulation in an unregulated market and potential shifts. How do you measure ability when the parameters are not clearly defined? As valuation analysts, we determine the cost of capital using inputs such as return on regulated public markets. Restrictions of public securities markets are often set in place through governmental bodies which impose arguable economic checks and balances. The…

  • QuickRead Top Story - Valuation/Appraisal

    Equity Size Premium

    November 13, 2019

    Observations and Delaware Fair Value (Part II of II) This is the second of a two-part article, read Part I here, that focuses on empirical evidence supporting the size premium adjustment, observations regarding the CRSP size premium 10th decile category, liquidity issues that may account for the size premium, and certain Delaware Chancery Court decisions involving a size premium discussion. In this second part, the author focuses on the latter two points. These are discussed since in the past few years there have been numerous fair value business valuation related disputes decided by the Delaware Court of Chancery that involved…

  • QuickRead Top Story - Valuation/Appraisal

    The Size Effect Continues to be Relevant

    March 13, 2019

    When Estimating the Cost of Capital (Part I of III) In this paper, published in three parts with NACVA’s QuickRead, Roger Grabowski reviews the size effect, potential reasons why one observes the size effect, and correct common misconceptions and address criticisms of the Size Premia (SP). Throughout this paper, the author shows that using a pure market factor as the sole risk factor in estimating the expected return provide an incomplete estimate. For the last four decades, research has shown that adjustments to the CAPM are required. Here, Roger Grabowski addresses some of the criticism to the theoretical basis of…

  • QuickRead Top Story - Valuation/Appraisal

    Morningstar Discontinues SBBI Valuation Yearbook

    November 20, 2013

    Summary and Solutions Morningstar announced in September 2013  it will discontinue publishing the SBBI Valuation Yearbook, but that it will continue to publish the Ibbotson SBBI Classic Yearbook.  James Harrington, who was previously director of business valuation research in Morningstar’s Financial Communications Business, provides a summary of which data is being discontinued and continued, along with a discussion of alternative data sources in light of the recent announcement.