Sanity Checks to Keep it Real and Defensible (Part II of II) This is the second QuickRead article on interest rate volatility and modeling, read Part I here. As valuation professionals, we know that we need to develop and test the interest rate assumption. Valuation professionals also need to understand the impact that an interest rate used will have on the cash flows and value of the firm, and ensure that ...

The Choice of Models and Considerations When Developing a Rate for Your BV Report (Part I of II) Why all the excitement about interest rate volatility? Can’t we just look at a multi-year average and use that in our calculations? Well, we could, but considering recent and expected volatility, that might lead to some big errors. There are several reasons. In this article, the author discusses various models a ...