Use in Private-Business Valuation (Part IV) In this fourth article, the authors show how to apply the IPCPL theory using public market cost of capital. Read Part I, Part II, and Part III Application of IPCPL Theory When Bob Dohmeyer, Pete Butler, and Rod Burkert published their article on the IPCPL in 2013, they developed a discount rate from the Deal Stats database. In 2015, we published an article in which we set forth that their incite that the difference between the cost of capital in a public market and private market is largely due to the difference in transaction…
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and its Application to Enterprise Valuation The value of a firm must equal the value of the claims on its assets. In practice, this is generally expressed as the value FIRM = value DEBT + value EQUITY. Similarly, in a balance sheet prepared in accordance with generally accepted accounting principles (GAAP), assets = liabilities and equity. By comparison, an economic balance sheet is constructed using market values rather than amounts reported in accordance with GAAP, items included are classified as operating, non-operating, debt or equity-related rather than current or long-term, asset or liability, and it includes economic assets and liabilities…
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Dispute Defensible Best Practices, Part 3 of a three-part series In this third part, the last of a three part series, the author stresses that in order for a policy “review” or annual statement to rise to the level of a true “audit”, it needs to incorporate all elements of the above criteria. It needs to do this in a format providing actionable information. Without actionable information, a “review” cannot be meaningful in a dispute. The audit will include a rate class assessment, sustainability review and gathering of policy data. The audit report will include an Executive Summary, an Action…
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Disputes Defensible Best Practices (Part 2 in a 3-Part Series) In this second part of a three part series, the author looks at examples of how potential catastrophes have been avoided or reversed by employing a comprehensive policy audit. He then focuses on what is needed to make a policy audit dispute defensible.
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Rule Will Require a Second Appraisal in Situations Where a Home is Being Flipped for a Quick, Higher Resale A new rule passed Jan. 15 gives mortgage lenders an additional year to institute appraisal standards for higher-risk loans, Bloomberg reported, and Appraiser News Online highlighted. The extension is one of the revisions that regulators made to the Dodd-Frank Act to address concerns from financial firms. Appraiser News Online explains that: