Tests of Reasonableness Business appraisers use tests that ask whether decisions made are legitimate and designed to remedy a certain issue under the circumstances. These tests are commonly referred to in the valuation literature as tests of reasonableness. Several methods have been suggested and employed (e.g., purchase justification test), but limited literature speaks to the use of a test of reasonableness for company specific risk premia (CSRP). This article explores data sources and analyses available to appraisers to provide a “test of reasonableness” to increase the confidence level and analysis of their CSRP analysis. Business appraisers use tests that ask…
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The issue of dividends and dividend policy is of great significance to owners of closely held and family businesses and deserves considered attention. This highly informative blog is excerpted from Z. Christopher Mercer’s (founder and chief executive officer of Mercer Capital) newest book: Unlocking Private Company Wealth. To read the full article in Mercer Capital’s Financial Reporting Blog, click: An Introduction to Dividends and Dividend Policy for Private Companies. This article is republished from Mercer Capital’s Financial Reporting Blog. It is reprinted with permission. To subscribe to the blog, visit: http://mercercapital.com/category/financialreportingblog/.
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Benchmarking the firm’s performance We all know financial ratios are a barometer of the health of a company. Now, let’s help our client’s unleash the power of these ratios to improve their businesses. Here’s how.