The NJCPA Business Valuation Forensic Litigation Services Interest Group invites you to attend this Roundtable Discussion. These informative, educational sessions provide participants with a local peer network to share leading-edge information and share best practices in a neutral setting.
HIGHLIGHTS
Within the valuation community, there are different variations of how to calculate the cost of equity capital while utilizing the income approach. For years the valuation community has utilized the Ibbotson SBBI Valuation Yearbook to extract market premium and size premium data. This collection of data aides, provided by Morningstar, Inc. tracked data since 1926 and was widely used (and sometime criticized in the community). Ibbotson’s has been discontinued in 2014 and Duff & Phelps is providing the financial services industry with the new valuation handbook. Discuss the differences between using Ibbotson and Duff & Phelps to calculate the cost of capital. See examples of the calculations and point out the differences in the assumptions and the classifications.
This presentation will focus primarily on the valuation of small and privately owned companies. Topics that will also be explained to thoroughly discuss the main point of the presentation include the components of the cost of capital (including the World War II bias), pros and cons of the two methods and what is meant by worth vs price.
COURSE LEVEL
Basic