VPS StraightTalk Webinar, October 20, 2022 This summer and fall 2022, within the business valuation profession, one of the most contentious issues has been “which cost of capital should business valuation professionals use when valuing a small business?” First, Dr. Damodaran advocated the implied equity risk premium with the capital asset pricing model without adding a size premium or company specific risk. He adjusts for other risk factors (size and company specific risks) by adjusting the forecasted cash flows. Next, James Hitchner, CPA, ABV, CFF, responded to Dr. Damodaran’s criticism. Shortly thereafter, Eric Nath, founder of Eri Nath & Associates,…
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Provides Independent Validation of Indicated Values Newly-minted valuation analysts may question the reasonableness of their conclusion of value. That is natural. In this article, the author introduces readers to the Hypothetical Willing Buyer-Willing Seller Sanity Check Model. This is a model developed by the author in connection with valuation of a 100% controlling interest.