Archive 2016-98: How to Defend Your Business Valuation




Archive 2016-98: How to Defend Your Business Valuation – Very Detailed Discussion of Components, Data, Methods, and Applications

**Webinar 98 Live Broadcast Date: September 22, 2016** Archive package includes handouts and slides synced with audio

VPS StraightTalk Webinar Series: How to Defend Your Business Valuation – Very Detailed Discussion of Components, Data, Methods, and Applications (Based in Part on Two Recent “Blockbuster” Court Case Opinions)

Hitchner uses two blockbuster court case decisions (August and July 2016) as a backdrop to an intense discussion of very detailed Court opinions of Valuation components, data, methods, models, and applications. The Courts discussed each experts’ positions on a wide variety of topics and then decided what to do. There is an exceptional amount of detail. BV analysts MUST know about these two cases. Hitchner expresses his personal opinions of the often countering positions of five experts and tell you whether he agrees with the Courts’ decisions.

Learning Objectives:

  • The participant will learn varying views on many valuation topics
  • The participant will learn how two judges evaluated five different experts
  • The participant will learn what Hitchner thinks of the five experts divergent views on many areas in valuation


Subjects to be Covered in Court Case One – ISN Software Corp. Appraisal Litigation

  • Sole reliance on the discounted cash flow model
  • DCF projection period
  • Long-term growth rates

  • Normalization adjustments
  • Working capital adjustments in the DCF
  • Nonoperating assets

  • Capital asset pricing model
  • Rejection of all other valuation methods

  • Comparability of public companies

  • Capitalization of cash flow vs. DCF method
  • Guideline company transactions method
  • Use of prior transactions in the company
  • Effect of zero debt on the WACC

  • Size premium

Subjects to be Covered in Court Case Two- Appraisal of DFC Global Corp.

  • Capital structure
  • Cost of debt

  • Size premium
  • Selection of size premium decile(s)

  • CRSP data vs. Risk Premium Report data

  • Size premium – selection of market capitalization
  • Tax rate for the WACC and beta

  • Discounted cash flow model
  • Net working capital in the DCF model
  • Excess cash
  • Two-stage or three-stage DCF model
  • Perpetuity growth rate
  • Guideline public company method

  • Public company peer group comparability

  • Median vs. 75th percentile multiples

  • Use of invested capital to EBITDA multiples

  • Period for earnings parameters in the multiples
  • Beta
  • Use of Barra betas

  • Use of raw betas

  • Use of forward looking adjusted betas

  • Beta smoothing vs. raw data

  • Public company peer group for betas

  • Use of subject company beta

  • Beta measurement period

  • Frequency of beta calculation

  • Beta unlevering/relevering formulas

  • Stock based compensation adjustments

  • Guideline company transactions method

  • Reliability of the deal price for value

  • Weighting of values

  • Assessing regulatory risk

  • Gordon growth model


Information on CPE credits, refund policies, and complaint resolution can be found at Note that VPS does not offer CPE for archived webinar programs. .

This downloadable archived webinar package is an interactive video of the webinar with the original webinar handouts.

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