In defense of the Discounted Cash Flow Method Richard R. Conn challenges criticism of the Discounted Cash Flow Approach and premise that the Market Approach is superior to an Income-Based Approach, even when there is more just superficial observations. The author proposes that “ it is important to realize that the circumstances in which the DCF Method indicates a different value than the market price should ...

Focus on shareholder disputes (slip opinions) Ruggiero v. Ruggiero is a New York Slip Opinion (cannot cite as authority) that is a classic battle of valuation experts.  The opinion  highlights how a New York State judge reached her decision and also provides an opportunity to deliberate and consider what can go wrong when a buy-sell agreement is either not in existence or is considered dated. Breidbart v. W ...

A Quick Initial Assessment of an Appraisal Assignment Can Help Determine Which Approach and Which Tools to Use. Here’s Why That Matters. Appraisers have a large toolkit. When we pursue certifications, the tests we have to pass and our demonstration reports show that we know how to use tools properly, and certifications demonstrate our competency. In the real world, we are also in this profession to make a p ...

Critically Assess Underlying Data and an Appropriate Method for Value Determination Richard Claywell regularly reviews business valuations that seem to consider the asset, market, and income approaches in forming an opinion, but that never explain or justify a weighting methodology used to arrive at a final value conclusion. Here’s why that’s a mistake.   ...

In Berquist v. Commissioner, Judge Swift Finds a Company’s Pending Liquidation is Relevant and Foreseeable. Brand valuation is becoming an ever more critical business as intangible assets are increasingly being recognized as highly valued property, writes Sophie Roberts in Intellectual Property.  Consider: A vast majority of work your business is already doing today almost certainly affects brand value. Whe ...

Enterprise Value is a Perpetuity Concept, but Shareholder Level Values Depend on Expected Holding Periods.  Here’s Why the Difference Matters.  The conceptual logic regarding the income approach is difficult to refute, writes Chris Mercer on the Valuation Speak blog.  What can cause expected cash flows to minority shareholders to be less than the expected cash flows of the enterprise? What can cause the exp ...

In Palmerino v. Palmerino, the Massachusetts Court of Appealsconsidered whether a trial court erred in valuing the husband’s grocery store. The trial court’s approach had not included discounts—and went further to state that the income approach is preferable for valuation.  Find out what the court decides!  In Giaimo v. Vitale, the Supreme Court of New York considers the dissolution of a company called EGA ...