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In the last two posts in this series, we have addressed two of at least three issues that are not easily addressed in the context of the traditional levels of value concepts in statutory fair value determinations. Determining the proportionate interest in a going concern The applicability of “implicit minority discounts” in Delaware fair value […]

In the last post, we talked about the concept of the proportionate share of the value of a going concern that has deep roots in Delaware statutory fair value case law.  In Delaware, where the discounted cash flow method is the favored valuation method, the proportionate interest in a going concern is defined by the […]

There have been three posts thus far in this series on Statutory Fair Value. The first post introduced the topic of statutory fair value and provided the statutory definition of fair value in Delaware. Fair value is defined in Delaware Code Annotated Section 262(h) as (with parenthetical numbers and emphasis added): After the Court determines the […]

We started our discussion of statutory fair value with an introduction (#1 Introduction) and followed that with a discussion of the DCF valuation method (#2 Discounted Cash Flow (DCF) Method). We now turn to the levels of value charts that are at the heart of every valuation decision made in statutory fair value determinations, either […]

We continue our discussion of statutory fair value with an outline of the discounted cash flow (DCF) model (or method).  The DCF valuation method is a core method within the Income Approach to Value (with the other two approaches being the Asset Approach and the Market Approach). One objective of this series of posts on […]

Statutory “fair value” is the standard of value for valuation in the dissenters’ rights and shareholder oppression statutes of the majority of states.  I have testified on the fair value of equity interests at deposition and/or trial in 15 states over the last 30 years.  I speak as a business appraiser and a business man. […]

The Fourth Exposure Draft of proposed changes to the Uniform Standards of Professional Appraisal Practice (USPAP) raises an interesting question for business appraisers in the discussion of Section 3, Proposed Revisions Relating to Development and Disclosure of Exposure Time Opinion.  The reporting requirements in Standards 2, 6, 8 and 10 include the following Comment: The […]

What I have learned over the past 30+ years in this emerging valuation profession is that it is almost always (I never say always) a good idea to look at valuation questions, issues, and facts in terms of the implications for expected cash flows, expected growth of the cash flows, and the risks associated with the expected cash flows. It is certainly almost always a good idea to examine valuation in light of present value concepts.