A
rigorous and eye-opening treatment filled with applications for a wide
variety of scenarios in the valuation of privately held businesses, Quantitative
Business Valuation emphasizes regression analysis of real world transactions:
stock market returns, restricted stock discounts, and fractional interest
discounts from net asset value in the secondary limited partnership market.
The book is organized into five segments. The first three follow the chronology
of a valuation: forecasting cash flows, discounting to present value, and
adjusting for control and marketability. In the fourth, Abrams assembles
the pieces of the puzzle to present a unique and unified approach to valuation-one
that can be empirically tested and applied to firms of virtually any size-along
with a discussion of measuring valuation error. He concludes by covering
special topics: valuation of startups, measuring the dilution in value
that occurs in sales to Employee Stock Ownership Plans (ESOPs), and analysis
of company buyouts of partners and shareholders (which draws upon results
from ESOP valuations).
The
resulting work, solidly grounded in economic theory and including all necessary
mathematics, integrates existing science into the valuation profession-and
develops valuation formulas and models that professional practitioners
will find useful on a daily basis. A representative-but far from exhaustive-listing
of other business valuation topics covered include:
Mathematical derivation of cash flow · Using regression analysis · Annuity
Discount Factors · Superiority of arithmetic mean · Empirical
evidence of the size of control premium · Testing 5 models for restricted
stock discounts · Economic Components Model for Discount for Lack
of Marketability · Regression of The Partnership Spectrum data ·
Empirical tests of Abrams' valuation theories · Valuing startups
· Measuring and apportioning dilution in ESOPs
This book has a 5-Star Rating on www.amazon.com.
“Jay Abrams’ book is close to the equivalent of several graduate
dissertations rolled into one book. For each topic (covered), he presents
a scholarly summary of past research, new empirical research of his own,
and his conclusions. It is a well-documented contribution to in-depth understanding
of important business valuation issues, and should not be overlooked by the
serious practitioner.”
— Shannon Pratt, DBA, Shannon Pratt Valuations,
Co-Author, Valuing a Business and author of numerous other valuation
books.
“While a proliferation of business valuation treatises and guides
exists in the market, most are very general in nature and do nothing more
than rehash fundamental concepts. I am unaware of any author that has stepped
into the unknown as Jay Abrams has and compiled and developed a treatise
of extremely useful analytic tools for the serious valuator.”
— Robert
J. Grossman, CPA/ABV, ASA, CVA, Partner, Grossman Yanak & Ford.
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