Archive 2011-44: Hitchner Q&A Panel




Hitchner Q&A Panel- Cost of Capital, DLOMs and Reports: You Ask the Questions – We’ll Answer Them

Presented by
Jim Hitchner, CPA/ABV/CFF, ASA, Moderator with Rod Burkert, CPA/ABV, CVA and James Harrington

Webinar 44 Broadcast Date: November 30, 2011

In the past few years VPS has presented many webinars. Our most popular webinars include cost of capital, DLOMs and reports. These are also areas that
elicit a large number of questions. In this webinar we tackle these three major topics and answer whatever questions you have on cost of
capital, DLOMs and reports. We give straightforward answers to your most complex questions.

Learning Objectives:

· The participant will learn the correct way to use and reconcile Ibbotson and Duff & Phelps risk premium data using specific cost of capital

· The participant will learn what databases, models and studies are still valid in determining and defending a DLOM

· The participant will learn what needs to go into a solid report whether detailed, summary or calculation

Webinar Outline
(questions to be answered in addition to your questions):

  • Cost of capital questions that will be answered
    • Should I use Ibbotson supply side or historical/traditional equity risk premiums?
    • Should I use Ibbotson adjusted or unadjusted ERPs?
    • Should I use Duff & Phelps (D&P) adjusted or unadjusted ERPs?
    • Should I use D&P conditional or unconditional ERPs?
    • Is the size premium still a valid input?
    • Does the addition of a size premium preclude the use of a discount for lack of marketability/liquidity?
    • Can you use Ibbotson 10b, 10w, 10x, 10y or 10z?
    • Are industry risk premiums supportable?
    • How do you use D&P data to help calculate specific company risk?
    • Should you adjust the risk free rate, the equity risk premium or both in a changing economy?
  • Discounts for lack of marketability questions that will be answered
    • Should I be using restricted stock databases such as FMV Opinions or Pluris?
    • Can I still rely upon traditional restricted stock “benchmark” studies?
    • Is the QMDM defensible?
    • How has the new IRS DLOM Job Aid changed the landscape for calculating DLOMs?
    • Can you apply a discount for lack of marketability/liquidity to a 100% control interest?
    • Should I be using option models in calculating a DLOM?
    • What are the problems in using option models?
    • How much time should I spend in determining a DLOM?
  • Report questions that will be answered
    • When can I use calculation engagements and reports and summary reports?
    • What are the traps and problems in calculations, calculation reports and summary reports?
    • What should be the length of calculation, summary and detailed reports?
    • How do I adhere to BV reporting standards (AICPA, ASA, IBA, NACVA and USPAP)?
    • How do I reconcile the methods and values?
    • Is there any sample language and examples to NOT put in your reports?
    • How do I cite references for definitions, concepts and applications?
    • Are there any problems in the use of canned economic data?
    • Am I okay when relying on RMA and other types of benchmark data?
    • Should I use quantitative or qualitative weightings of values?

Included in this downloadable archived webinar package:

  • Audio/Video file
  • Webinar transcript
  • Original Webinar handouts

The archived webinar package is an Adobe Presenter PDF file that allows you to view the video of the webinar with the synced audio so that you see the presentation just as it was presented “live.” The Presenter format also allows for easy navigation through the webinar so you can quickly go to a specific section in the presentation. The handout materials are included in the file. To view the Webinar Presenter file, you must have Adobe Reader software version 9 or higher. You can download the free current version of Adobe Reader at Please note that CPE is only available for live webinar broadcasts.

Additional information

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