Understanding the Company-Specific Risk Premium: A Guide for Attorneys

Gross Mendelsohn

Understanding risk factors is essential in determining how a business will be valued. Let’s consider what your business-owning clients need to know about company-specific risks and how they come into play when it’s time for a business valuation.

Risk Premiums: A Look at CSRP

BVR

Is anything “company-specific” per se? Company-specific risk is not an ideal name for this risk. All firms face company-specific risks, many of which are somewhat similar across industries and companies. For example, how many firms have you valued that had to deal with the risk of customer concentration? company-specific risk

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PARAMETERS UPDATE P5.5

Equidam

You can refer to the table at this link to see how they will change for your country specifically. Most of the parameters determining the discount rate have been updated to reflect the most recent market situation in terms of systemic and industry-specific risk.

ComplySci stats: 39% of compliance professionals serving financial firms with government contracted work state the most significant challenge is the creation of and employee education on the firm’s pay-to-play compliance policy.

Complysci

In our recent webinar, “ Addressing political contribution risk during a midterm election year ” we sat down with political contribution compliance experts to discuss the regulatory risk that comes with heightened political activism.

PARAMETERS UPDATE P5.4

Equidam

You can refer to the table at this link to see how they will change for your country specifically. You can refer to the table at this link to see how they will change for your industry specifically.

Updating Annual Report Risk Factors

Harvard Corporate Governance

The Annual Report season will soon be upon us, and it is important to assess a company’s risk factors at the outset and whether recent developments, including those relating to macroeconomic, geopolitical, and public health conditions, have had (or are expected to have) a material impact on a company’s business, financial condition and results of operations. [1] I. Ten Key Developments to Consider when Updating Annual Report Risk Factor Disclosures.

Addressing the SEC pay-to-play rule: five overlooked areas that could put your firm at risk

Complysci

Is your firm equipped for the increased potential of pay-to-play risk and ramifications? As we prepare for the 2022 midterm elections, firms political contribution risk will only continue to increase.

What is the Capital Asset Pricing Model (CAPM)?

Andrew Stolz

It helps an investor understand what to expect to earn in relation to the risk-free rate and the market return. CAPM assumes that the minimum a rational investor would earn is the risk-free rate by buying the risk-free asset. Definition of Capital Asset Pricing Model.

Beta 52

How Disclosure and Information Intermediaries Strengthen the Credibility of Initial Coin Offerings

Reynolds Holding

However, while 65 percent of white papers contain some information about the expected use of proceeds from the ICO, only 4 percent mention venture-specific risk factors, and less than 2 percent provide any financial information or projections.

Addressing Emerging Risk With Agile Auditing

Audit Board

Trying to keep up with emerging risks can be exhausting. In my current role as a Senior Risk Manager in an IT SOX assurance team at Verizon, I am always concerned about staying ahead of emerging risks so we can address anything critical before it becomes a problem. .

How to Find a Technology Services Firm to Buy: I Can’t Find the “Right Fit” to Acquire

IT Valuations

It’s specific to the cultures of your tech firm and the one you’re searching for. It’s specific to the people who live and work inside both of these excellent firms. It’s a thorough examination of your two firms to determine the readiness for an acquisition, including a Calculation of Value and a close examination of the specific risks of doing a transaction.

Audit Committee Toolkit: Maximizing Value From Internal Audit

Audit Board

We’ve drawn upon our experience as former CAEs and, in Jason’s case, the current audit committee chair for the University of Texas at San Antonio, to put together some guidance for designing risk-based audit committee meetings. Reframe the Interaction Around Risks. Risk Trending.

Issuer Liability: Ownership Structure and the Circularity Debate

Reynolds Holding

While insurance may encourage moral hazard, the insurer should have incentives to reduce it by monitoring, requiring deductibles, or adjusting the insurance premium to the perceived risk. The incentive effects of liability depend primarily on how eager a board is to reduce liability risk.

The Mysteries of M&A Fees

Class VI Partner

Hiring your friend or your corporate attorney who does not have a lot of deal experience will end up costing you in the form of a less efficient process, higher risk of a busted deal, and potentially higher legal exposure post-closing. KEY ARTICLE TAKEAWAYS.

How to prepare a business for sale in 9 steps

Class VI Partner

Understand how to prioritize your work on the risks that are hurting value the most. Starting, operating and growing a business is hard work fraught with significant personal and business risk. KEY ARTICLE TAKEAWAYS. Learn the steps required to prepare a business for sale.

Credit Hedge Funds: Full Guide to the Industry, Strategies, Recruiting, and Careers

Brian DeChesare

Sell/Buy When Prices Change – For example, maybe company-specific factors result in the YTM of the Target bond falling to 6%, meaning its market price has increased. We’re betting that company-specific factors will change each bond’s price.

Beta 52

M&A Terms Every Business Owner Should Know

Class VI Partner

Asset Value Asset Value can refer to one of two things: the book value of a specific asset (i.e., what is the value of an asset as listed on the company’s accounting records), or the fair market value of a specific asset or group of assets. KEY ARTICLE TAKEAWAYS.

Debevoise & Plimpton Discusses White House’s Blueprint for an AI Bill of Rights

Reynolds Holding

But unlike many of those guidelines, it takes a rights-based approach that is focused on AI’s potential harm, rather than a risk-based approach, which means that the Blueprint’s recommendations apply to all covered automated systems, largely regardless of their risk. Requiring those organizations to put each model through a complicated and time-consuming compliance process is not an effective way to reduce the risks associated with automated systems.

2021 Audit Planning: Peer Review Insights

ThomsonReuters

The biggest deficiency that I see are teams that do not identify specific risks,” Shawn points out. “ The team goes in, understands the entity, but does not identify those risk. I’ve run into some teams that default to high risk.

Delaware Puts the Conduct of Business Covenant on Center Stage in COVID-Related M&A Dispute

Cooley M&A

In the decision, Vice Chancellor Laster found that buyer was unable to prove that the target business had suffered an MAE because the MAE definition specifically excluded the effect of any “calamities”—the plain meaning of which was deemed to include the COVID-19 pandemic. In this case, the definition did not include a specific exception for changes resulting from a pandemic, but did include an exception for “natural disasters or calamities.”

Dual-Track Processes: How to Turbocharge Your Exit

Cooley M&A

Relative to choosing a single exit strategy, a dual-track process tends to be more complicated and resource-intensive, while also posing some specific risks. Exiting an investment is an inherently uncertain process.

Gibson Dunn Offers 2022 Mid-Year Securities Litigation Update

Reynolds Holding

EPA has the potential to halt the SEC’s recently proposed climate risk disclosure rule in its tracks. Climate Disclosure Act of 2021 [HR 2570], Climate Disclosure Risk Act of 2019 [HR 3623], Climate Disclosure Act of 2018 [S 3481]). 2. Failure To Disclose Specific Risks.

Material Adverse Effect Clauses

Erik A. Lopez

Buyers, on the other hand, would counter that they shouldn’t bear the risk of adverse developments, particularly because sellers remain responsible for day-to-day operations of the target throughout the gap period. Specifically, an MAE must not have occurred during the gap period.

MAEjor Ruling: Delaware Court of Chancery Finds Target Suffers Material Adverse Effect and Acquirer Could Back Out of Transaction

Cooley M&A

In reaching these holdings, the court found that: the target’s business experienced a “dramatic, unexpected and company-specific downturn” shortly after signing due in part to “serious and pervasive data integrity problems” that adversely impacted the target’s regulatory compliance.