Appraisal Rights

JANUARY 15, 2021

Some key questions asked and argued were: Of relevance to private company investors: what is the standard of review appropriate when there is no market evidence for an appraisal fight, and the Court is forced to decide between a ‘battle of the experts’? We’ll continue to cover this case as the Delaware Supreme Court renders its decision.

Discounted Cash Flow 52

Discounted Cash Flow Capital Structure Appraisal Equity 52

Equilest

FEBRUARY 1, 2023

The book covers key concepts such as cap table analysis, discounted cash flow models, and comparable company analysis, among others. Specifically, it is used to set the exercise price of stock options and other forms of equity compensation that are granted to employees, directors, and other service providers.

Business Valuation 40

Business Valuation Appraisal Fair Market Value Equity 40

Chris Mercer

FEBRUARY 14, 2024

This second musing addresses the use of restricted stock studies to support marketability discounts in gift and estate tax appraisals prepared for the Internal Revenue Service (or for anyone, for that matter). This musing is addressed to all appraisers, regardless of which valuation credential(s) they hold.

Marketability 52

Marketability Dividends Appraisal Business Valuation 52

Chris Mercer

MARCH 8, 2023

Therefore, in every fair market value determination prepared by business appraisers, it is critical that both buyers and sellers are present for the negotiation. Every appraisal involves the specification of the relevant standard, or type of value. A hypothetical transaction occurs on the valuation date.

Fair Market Value 52

Fair Market Value Marketability Appraisal Business Valuation 52

Appraisal Rights

AUGUST 8, 2017

In its valuation decision, the chancery court examined three metrics – deal price, comparable companies, and a discounted cash flow analysis – and gave equal one-third weight to each of those inputs.

Discounted Cash Flow 40

Discounted Cash Flow Comparable Company Analysis Risk-free Rate Appraisal 40

Chris Mercer

JUNE 20, 2023

The equation summarizes the discounted cash flow model when CF(1) is expected to grow at the constant growth rate of G into the indefinite future, and all cash flows are reinvested in the business at the discount rate of R or paid out to investors (or some combination of reinvestment and payout).

Business Valuation 52

Business Valuation Discounted Cash Flow Appraisal Marketability 52

Equilest

APRIL 11, 2023

With limited features and formulas, it can be difficult to account for all the necessary parameters in a valuation, such as interest rates, equity risk premiums, and beta. It lacks interest rates, equity risk premiums, beta, and other important data. It has interest rates, equity risk premiums, beta, and other important data.

Business Valuation 40

Business Valuation Beta Risk Premium Discounted Cash Flow 40

Equilest

JUNE 13, 2023

Income-Based Approach The income-based approach values the business by assessing its ability to generate future income and cash flow. Methods such as discounted cash flow (DCF) analysis and capitalization of earnings are commonly used to determine the present value of expected future cash flows.

Business Valuation 52

Business Valuation Asset-based Approach Appraisal Intangible Assets 52

Value Scope

JANUARY 13, 2021

Intrinsic Value” is what equity research analysts use when they look at public stocks and bonds. Additionally, Section 1.611-2(g) outlines some considerations that a valuation of mineral properties must include for tax-oriented appraisals. ValueScope generally uses this method, by building a discounted cash flow analysis.

Fair Market Value 130

Fair Market Value Discounted Cash Flow Treasury Marketability 130

Value Scope

JANUARY 13, 2021

Intrinsic Value” is what equity research analysts use when they look at public stocks and bonds. Additionally, Section 1.611-2(g) outlines some considerations that a valuation of mineral properties must include for tax-oriented appraisals. “Fair Value” is the US GAAP application standard.

Fair Market Value 100

Fair Market Value Discounted Cash Flow Treasury Marketability 100

Appraisal Rights

JUNE 5, 2017

And none of the other projections prepared outside of PetSmart ( e.g. , by the buyer) reflected PetSmart’s “operative reality” for purposes of appraisal. A private equity firm, BC Partners, paid $83 per share in cash for PetSmart stock, and the merger closed on March 11, 2015.

Private Equity Firm 40

Private Equity Firm Discounted Cash Flow Equity Appraisal 40

Appraisal Rights

JUNE 5, 2017

Further to our prior post about Delaware’s two new appraisal decisions, SWS Group was a small, struggling bank holding company that merged on January 1, 2015 into one of its own substantial creditors, Hilltop Holdings. Stockholders of SWS received a mix of cash and Hilltop stock worth $6.92 at closing. below the merger price.

Beta 40

Beta Risk Premium Capital Structure Discounted Cash Flow 40