Week5 assignments

Here are the assignments for week 5 (Apr 11, 13). You'll want to read Chapter 5 (Business Valuation) on the course website.

Monday group (due Sunday, 6:00 pm - April 10)

Please prepare a 3-4 page memo on the Estate of Desmond v. IRS case. Please consider whether the court correctly assessed the various discounts and premia at issue in the case? Consider the questions at the end of the case synopsis - particularly on the court's use of CAPM and analysis of control power. Explain how you might have valued the company if you were the tax court. (Remember please include both a textual and a spreadsheet answer to these questions). You can find the case in 5.4.1 Ownership interests Email your memo to me as an attachment (preferably Word, with any spreadsheet imbedded in Word).

Wednesday group (due Tuesday, 6:00 pm - April 12)

Please prepare a 3-4 page memo on the Steiner Corp. v. Benninghoff case. Analyze the court's understanding of "fair value" and whether its methodologies were consistent with this understanding. Identify any problems with the methods the court used, in particular its cash flow analysis, calculation and weighting of discount rate, and its amalgamation of its methodologies. How would you have done things differently if you were the judge? (Remember please include both a textual and a spreadsheet answer to these questions). You can find the case in 6.4.2 Business valuation in corporate appraisal

As always, I invite your proofreading and "click" reading suggestions.

Coming attractions:

• visit by Mr. Doyle Early (read 5.2.4 Excess Earnings Method)
• visit of Michael Paschall & George Hawkins / Banister Financial)