Business Valuation Review Volume 37: Issue 4

Hello Everyone,

This is the last Letter from the Editor that will be written by me. I am anticipating retiring and am transitioning my editorial duties for the Business Valuation Review to the new editor, Dr. Victor Jarosiewicz.

It has been a good six years since I took the editorial helm from Roger Grabowski, a giant in our field and an esteemed mentor to me. Time moves quickly!

After retiring from the BV profession, I will devote my energies to my wife and family, Biblical scholarship, and getting involved in our church in Williamsburg, Virginia, our new home.

Implied private company pricing line (IPCPL) theory is based on the fundamental assumption—taken from modern asset pricing theory—that two or more equity interests that have the same risk exposures and risk sensitivities must have the same expected rates of return. IPCPL theory, however, includes the additional assumption that transaction costs generally differ across equity interests and markets, and such differences influence expected rates of return. This study generalizes IPCPL theory to explain and predict the relationship between equity prices set under conditions where equity transaction costs differ across any market setting—including differences both within and across private and public markets—and then presents preliminary empirical evidence from private capital market data that is largely consistent with the theory.

The purpose of this article is to clarify what appraisal review is and is not, according to USPAP Standards 3 and 4, and the ways in which appraisal review education can be of benefit to appraisers and ultimately benefit the users of the appraisals. Further discussion includes the qualities that determine credibility of an appraisal, the importance of focusing on the review and critique of a specific appraisal report rather than the appraiser, and the importance of appraisal review education for appraisers who perform review. The ASA offers an accreditation in appraisal review that is of benefit to both the appraisal profession and the public at large.

Practitioners use goodwill multiples for valuing automobile dealerships. In this paper, the valuation accuracy of five goodwill multiples and seven more traditional multiples that can be used for estimating the market value of the equity of car dealerships is assessed during the 2010–2016 period. Our results support that the goodwill multiples provide the smallest estimation errors in valuing the market value of automobile dealerships.

Editor's Column

Private Market Equity Prices and Transactions Costs: Generalized IPCPL Theory and Private Market Empirical Tests

Appraisal Review: What It Is, What It's Not—And Why It Matters

Multiples Used to Estimate Automotive Dealerships Market Value

Creative Destruction and the Perpetual Growth Assumption

Equity Volatility Size Adjustments by Industry

From the Chair

BV Review Welcomes a New Editor

Volume 37, No. 4 — Complete Issue

From the Editor

Customer Concentration: Good, Bad, or Ugly?

From the Chair

Delaware Valuation Decisions, 2021 to 2024

Volume 44, No. 1 — Complete Issue