The Butler Pinkerton Calculator: An Update - BVMarketData

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The “Battle of the Experts” is Over Before it Even Began Total Cost of Equity (TCOE) Litigation Consulting Firms More defensible 18.50% 18.00% 17.50% Empirical data BPC BPC 17.00% 16.50% 16.00% 15.50% BPC BPC BUM Out of thin air 15.00% Guess 14.50% 14.00% FCN ($2.7B) HURN ($1.0B) NCI ($600M) CRAI ($265M) Subject ($?) Subject: risk-free=4.16% (5/18/09); ERP = 6.5%; BUM = build-up method: IRP = -1.46%; SP = 5.81%; CSRP = 0.5% (Guess); BPC = Butler Pinkerton Calculator: 5-year-lookback; Market proxy = S&P 500 16
Interesting Observation: “I Don’t Have any Good Guidelines!” • BUM with an IRP: You already have assumed “good” guidelines – at least for systematic risk. – Use BPC to impeach inferior estimates of the cost of capital • Broaden your search: Guidelines = guidance – Joyce C. Hall v. Commissioner: • Hallmark Cards v. MCD, BUD, IBM, KO, AVP • Many small publicly-traded companies. • Company-specific risk is just that – company specific. 17
Page 1 and 2: The Butler Pinkerton Calculator: An
Page 3 and 4: Let’s Get Some Things Out of the
Page 5 and 6: Traditional Factor Models: Use at O
Page 7 and 8: The Courts Want Empirical Data! •
Page 9: The Solution: Total Beta and the BP
Page 13 and 14: More Transparency 13
Page 15: Impeach Inferior Estimates of Cost
Page 19 and 20: Other BPC Applications: • First,
Page 21 and 22: Other BPC Applications (continued):
Page 23 and 24: Total Beta:BPC and Peer Review 1) R
Page 25 and 26: Another Select Testimonial • We b
Page 27 and 28: Questions to Consider: • If Total
Page 29 and 30: The Butler Pinkerton Calculator: An
Page 31 and 32: Are You on the Left-side or the “
Page 33 and 34: Other Observations: Instability of
Page 35 and 36: Response to Roger Grabowski’s Sli
Page 37: Summary: • All models are wrong,

The Butler Pinkerton Calculator: An Update - BVMarketData

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