Handbook of Advanced Business
Valuation
International cost of
capital, blockage discounts ,valuation issues unique to ESOPs, specific valuation issues
for sports teams,capital structure in emerging growth companies... methods for calculating
equity risk premiums
These days, understanding the
complex issues in advanced business valuation requires a team of . experts. The Handbook
of Advanced Business Valuation is your team of valuation experts nationally
recognized practitioners and legal minds from across the country who provide authoritative
answers and innovative solutions to today's toughest business valuation problems.
Do you have a specific
question on estimating the cost of capital? Shannon Pratt, the "dean" of
business valuation experts, describes the components of the cost of capital and presents
invaluable methods to estimate the value. Wondering whether S corporation status will add
a premium to your company's value? Gary Trugman discusses the factors that influence this
critical business decision.
Are you a minority or
dissenting shareholder fighting for the fair value of your shares? Jay Fishman and Anne
Singer describe how recent courts have decided these matters and the common methods used
for determining fair value. For investors and investment analysts, James Rabe and Tracy
Lefteroff outline ways to resolve valuation difficulties and discover unseen opportunities
in emerging growth companies.
Structured in a
user-friendly, general-to-specific arrangement, The Handbook of Advanced Business
Valuation represents a broad cross section of the latest conceptual thinking on the
subject. Only in this thought-provoking volume will you find:
• Abstracts and
interpretations of recent empirical studies in lack of marketability, blockage, and more
• In-depth treatment of
specialized valuation issues from many industries including healthcare, technology, and
sports franchises
• Lucid, intuitive
explanations of complex and esoteric procedures for intercompany transfer pricing analyses
and ad valorem property tax appraisals
Like its predecessor volume
Valuing a Business •which covered basic business valuation concepts and practices in an
authoritative, all-encompassing fashion The Handbook of Advanced Business Valuation
provides a new benchmark of advanced, contemporary discussions for investors and
experienced business valuation practitioners. Valuation experts from
PricewaterhouseCoopers, Ernst & Young, Willamette Management associates, Arthur
Andersen, American Appraisal Associates, and more combine their expertise in this
well-written, thoughtful, and convincing reference one with absolutely no close rival in
the flourishing field of business valuation and security analysis.
Content of the Book
We explore and debunk
controversial topics unlike any other book. Handbook of Advanced Business Valuation sheds
light on critical issues such as:
• What is the best way to
estimate the required return on an investment and how is that estimate different if the
investment is not in the United States?
• How is the value of
securities that are not traded on organized stock markets affected by their lack of
liquidity?
• What business valuation
opportunities exist for wealthy individuals?
• How are business
valuation techniques used and abused in litigation over economic damages or the fair value
of a minority shareholder's interest?
• What are the essential
factors that drive the value of sports franchises?
• How can business
valuation techniques be used to reduce property taxes?
• What are ESOPs and why
are they valued differently from other business interests?
• Will my company be worth
more if I make the S election?
This book is presented in
four parts. The earlier parts include more general topics. The later chapters present more
specific topics.
Part I presents general
technical topics that may be applicable to most complex business valuations. These topics
include estimating the appropriate cost of capital (for both domestic and international
valuation analyses), estimating equity risk premiums, and quantifying various valuation
discounts.
Part II presents examples of
special applications of valuation methods. These special applications include S
corporation valuations, family limited partnership valuations, and in-process research and
development valuations.
Part III discusses the
conceptualization and conduct of business valuations for specific purposes. These specific
purposes include estate planning and intergenerational wealth transfer, ESOP formation and
financing, ad valorem taxation assessment, estimation of economic damages, fair value
analyses in oppressed shareholder litigation, fairness and solvency analyses, and
transaction planning and structuring.
Part IV presents special
valuation issues related to specific industries. These chapters discuss advanced valuation
issues in such diverse industries as sports franchises, automobile dealerships, radio
broadcasting companies, health care, emerging and technology companies, and government
contractors.
Audience for the Book
This book should be useful to
a variety of constituencies who are interested in specialized business valuation topics,
including:
1. Experienced business
valuation analysts who want to remain current with the most up-to-date professional
developments.
2. Less experienced valuation
analysts who want to prepare for a specialized valuation assignment.
3. Investment bankers,
business brokers, accountants, and other transactional intermediaries who participate in
the valuations and sales of businesses and business interests.
4. Commercial bankers and
merchant bankers who finance the purchases of businesses and business interests.
5. Lawyers, judges,
regulators, and other members of the legal community who have to interpret business
valuations.
6. Business owners,
stockbrokers, chief financial officers, tax managers, and investors who rely upon business
valuations for transactional, taxation, financing, and strategic planning purposes.
Each audience may have a
different level of interest in the theoretical concepts, practical applications, and
empirical data presented in this book. One word of caution is in order, however. Casual
readers of a book like this may read only a few chapters and convince themselves that they
have a rigorous comprehension of this complex subject. The valuation and economic analysis
of businesses and business interests is an evolving discipline. Even the serious reader of
the entire book will begin but not complete an exploration of this complex topic.
About the Editors
Robert F. Reilly and Robert
P. Schweihs are
managing directors of
Willamette Management Associates, a national valuation consulting, economic analysis, and
financial advisory firm. They are both accredited senior appraisers in business valuation
of the American Society of Appraisers and coauthors of a number of highly regarded
valuation books, including Valuing a Business, Valuing Small Businesses and Professional
Practices, Valuing Intangible Assets, and Valuing Accounting Practices.
Mr. Reilly is a certified
public accountant, a chartered financial analyst, a certified review appraiser, a state
certified general real estate appraiser, and a state certified affiliate of the Appraisal
Institute. He currently serves as a member of the Issues Resource Panel of the Appraisal
Foundation. As an appraiser and economist, Mr. Reilly is often called upon to testify in
domestic and international courts regarding the valuation of businesses and business
interests along with various economic damages issues.
Mr. Schweihs serves as a
Trustee of The Appraisal Foundation and as a member of the Industry Advisory Council of
The Appraisal Foundation. He, too, is often called upon to testify as an expert witness in
contested valuation and economic analysis matters.
520 pages