http://www.bvresources.com 2012 DCF inputs and assumptions Question Title * 1. For this and all of the following questions, assume that you are valuing an equity interest in a private company under the income approach using a discounted cash flow analysis. In your standard practice, how do you treat cash: Do you add it all back into the company's value, or only the amount in excess of "normal" operating needs, as determined by historic or industry practice (whichever is most appropriate under the circumstances)? Add all cash back in Add only the amount in excess of normal operating needs Please comment if you'd like: Question Title * 2. Do you typically apply a discount for lack of marketability and/or liquidity to a controlling (100%) interest in the company? Yes No Please comment if you'd like: Question Title * 3. Do you treat excess officer compensation as a "normalizing" adjustment or a "control" adjustment? Normalizing adjustment Control adjustment Other (please specify) Question Title * 4. Do you typically maintain the same weighted average cost of capital throughout the income projection period? Yes No, I adjust it for market, company-specific, or other risks Please comment if you'd like Question Title * 5. Should depreciation equal capital expenditures in the terminal year? Yes No Other (please specify) Question Title * 6. Do you still apply the discount data from Partnership Profiles? Yes No, I am concerned about relying on the decreasing number of transactions in the database Other (please specify) Question Title * 7. If the modified CAPM assumes that public market investors can diversify non-systematic risk, do you typically add a company-specific risk premium to calculate the cost of capital for your subject company? Yes, to account for a private company investor's general inability to diversify No, but I do account for company-specific risk in the income projections or discount rate Other (please specify) Question Title * 8. Do you consider any additional aspects of the DCF analysis to be "settled-but-unsettled"? Please comment further, below. Exit >>
