The Butler Pinkerton Calculator: An Update - BVMarketData

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Total Beta and The BPC: Why Not Now? • Subjective Factor Models Provide NO empirical data for Total Risk or CSRP! – Any other source is subject to harsh criticism – BPC is not a solution in search of a problem • BPC provides (moderately subjective) EMPIRICAL data: – Defend/support all assumptions/inputs • No different than any other cost of capital input – Except the BPC provides real-time, transparency for specific guidelines – Except the BPC empowers you to observe the sensitivities in the calculations 26
Questions to Consider: • If Total Beta and the BPC (which empirically capture total risk) were developed first, would you abandon them to rely upon other databases (which only capture partial risk)? • If Total Beta and the BPC were developed first, would you abandon them to rely upon the purely subjective factor models (which require a complete guess for a CSRP)? – One thing we do recognize is that the valuation profession can use more tools grounded in market observations to help develop discount rates – Roger Grabowski; BV Update - November 2006 • Note: The BPC was commercialized in November 2007 27
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 and 16: Impeach Inferior Estimates of Cost
Page 17 and 18: Interesting Observation: “I Don
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: Another Select Testimonial • We b
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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