LJKcpatop.jpg (31978 bytes)
LJKLeftEndBlue.jpg (856 bytes)Home.jpg (2172 bytes)Redspacer.jpg (830 bytes)Survey.jpg (2914 bytes)Redspacer.jpg (830 bytes)Contact Larry J. Kasper, CPA.jpg (2441 bytes)Redspacer.jpg (830 bytes)How to Place an Order.jpg (2189 bytes)Redspacer.jpg (974 bytes)Site Map and Page Index.jpg (2706 bytes)Redspacer.jpg (974 bytes)Search by Key Word.jpg (4193 bytes)Redspacer.jpg (974 bytes)Vita of Larry J. Kasper.jpg (1646 bytes)LJKRightEndBlue.jpg (860 bytes)

Business Valuations:Link to Business and Economic Valuation Services.jpg (4610 bytes)
Advanced Topics

Introduction

This book received the prestigious "Publication of the Year" award from the Institute of Business Appraisers (IBA) in recognition of its contribution to the business appraisal profession.

I wrote Business Valuations: Advanced Topics because I was frustrated by the lack of objectivity in most of the valuations I saw and the research I found. Most authors simply explained their conclusions as "based upon my experience." If there is no theory or verifiable data, the valuation is simply a guess.

My book examines financial theory and the empirical evidence that either supports or refutes conventional, prevailing wisdom for valuing privately held companies. Read on to see what’s in the book and how you may order it.

Business Valuations: Advanced Topics

What Others are Saying About the Book

Contents
Preface
General Framework for Business Valuations
The Efficient Market Hypothesis
Fair Market Value
The Parameters of Valuation Practice
Issues in Federal Taxation
Special Tax Valuation Rules
Trial Strategy and the Business Valuator
Valuations for Divorce

Preface

The preface explains the purpose of the book and its attempt to satisfy the professional and business valuator who want to know not just the "how", but the "why" of business valuations.
(Contents)

General Framework for Business Valuations

Revenue Ruling 59-60 is examined in light of modern financial theory and concludes that it is still relevant for valuing privately held businesses after almost 40 years from the date of its issue. It places expectations of future performance and risk above past results.
(Contents)

The Efficient Market Hypothesis

The EMH is the cornerstone of modern financial theory. It can be used to examine many aspects taken for granted in the prevailing wisdom including the application of the small stock premium to capitalization rates, validity of market data comparisons, application of premiums and discounts for control and minority interests, and explaining the wide divergence in valuation experts’ opinion of value.
(Contents)

Fair Market Value

The definition of "fair market value" is examined in light of the many refinements provided by court decisions. It is compared to the financial theory concept of "fair value." It is surprising how many valuations claim to portray "fair market value" yet usually employ comparisons to market data that violate the definition. However, the motivation of court decisions is not always consistent with reality.
(Contents)

The Parameters of Valuation Practice

This part of the book examines modern financial theory and the empirical evidence. It contains many mathematical proofs, generally using simple algebra. There are many insights given that benefit the reader even if the proofs prove too tedious. The purpose of the proofs is to demonstrate the validity of the concepts and conclusions reached and may be skipped. The topics explored include Common Stock Valuation Models, Premiums and Discounts, the Capital Asset Pricing Model, Estimating Betas and the Market Risk Premium and Return, Debt-Free Valuations, Adjusting Betas for Publicly Held Companies to Derive Private Company Betas, and Inflation and Valuation. Techniques are developed to filter private company transaction data for better company comparisons, more valid concepts for applying premiums and discounts, and developing discount (capitalization) rates.
(Contents)

Issues in Federal Taxation

This chapter examines how the courts in federal tax valuations have decided such issues as objective appraisals, fair market value, selling expenses and taxes, assemblage, swing vote stock, attribution and aggregation. It also cites cases that support modern financial theory in federal tax valuations.
(Contents)

Special Tax Valuation Rules

The Revenue Reconciliation Act of 1990 enacted many special rules for private business interests in estate and gift tax valuations including the relevance of buy-sell agreements. The result of this Act became Chapter 14 of the Internal Revenue Code. This chapter is an in-depth examination of these code sections and their regulations.
(Contents)

Trial Strategy and the Business Valuator

Much has been written on the general subjects of expert witness testimony and litigation support by experts. This chapter goes beyond the usual lists of "Do’s" and "Don’ts" for the expert and explains what each side attempts to accomplish in each step of the litigation process. Both attorneys and experts will benefit from the insights provided from my own experience working with attorneys and teaching many of these techniques in seminars. "Approach opposing counsel at depositions as you would a sleeping Doberman at a junkyard—slowly and with great respect." (Page 278)
(Contents)

Valuations for Divorce

Nowhere in the field of business valuations is gamesmanship more prevalent than in valuations for a divorce. The most unusual concepts are proposed in the name of fair market value to achieve a desired result. This chapter examines many of the ploys used and alerts counsel, experts, and clients to their flaws. Would it not be better if we could agree upon the ground rules and then let the experts for each side apply them to the best of their ability to arrive at their professional opinions of value?
(Contents)

What Others are Saying About the Book:

". . . is worth your reading. . . We found each chapter rather unique with ideas not found in the conventional texts."—James H. Schilt, Editor, Business Valuations Review, December 1997, Page 166.

"Most importantly, you have addressed the theory of what business appraisers do, and the relationship between theory and practice. Too much of the literature of business appraisal is concerned with the ‘what’ to do, without explanation of the ‘why.’ . . . I wish that all professional business appraisers would study your book."—Raymond C. Miles, Executive Director, IBA.

"Business Valuations: Advanced Topics . . . fills the critical void in the valuation literature. . . between financial theory text books and the practitioner how-to books"—Grant McQueen, Associate Professor of Finance, Marriott School of Business, Brigham Young University.

". . . it is quite detailed in many of its topics and probably not recommended for the business valuation novice.  Kasper presents a comprehensive discussion of the Efficient Market Hypothesis and its relationship to valuation.  The litigation section is quite different from what most BV books would cover.  Kasper does an excellent job in defining the valuation expert's role and purpose in the context of litigation.  The math can be navigated, but we recommend readers allow plenty of time to work through both the math and Kasper's comments.  However, despite the sometimes cumbersome math, this book does have something to offer even the most seasoned business valuation practitioner."—Shannon Pratt's Business Valuation Update, December 1998, page12.

"The author has paid meticulous attention to derivation of the formulas and equations . . . For example, readers might find the coverage of the constant growth as well as the capitalized earnings models amd their linkage to business valuations quite impressive. . . Another important achievement of the book is its comprehensive coverage of the CAPM.  The book further focuses on Chapter 14 of the Internal Revenue Code.   This chapter of the book should particularly appeal to certified public accountants, attorneys, and financial professionals who specialize in estate planning.. . .  The last two chapters of the book (litigation and divorce valuations-ed) should be quite useful to those professionals that practice business valuations primarily from the litigation side." —"Recent Publications," Saeed Tabriz, Ph.D., The Ohio CPA Journal, Volume 59/No. 2, April-June 2000.

Both amazon.gif (2393 bytes)and Barnesand Noblet.gif (1220 bytes)  can provide additional information about my book and related business valuation books.   Both also usually state that there is a 4-7 week shipment wait but that is not truethey are trying to pressure the publisher into giving them a discount which they may or may not pass on to you.  If you order from them, you will get your order in about 10 days, regardless of what they say in the order information.  However, before you go to their links, you need to know that you probably will not get a better price than by ordering directly from the publisher, Quorum Books below.  After you check out amazon.com, or Barnes and Noble, return here to get the fastest shipment.

(Top)

Click Here to order this book from Quorum Books and read additional reviews.