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Liquidity Discounts: Option Based Methods

Business Valuation

 Liquidity Discounts: Option Based Methods
CPE Credit

Program Type: Recorded Webinar (Audio, PPT Presentation)
Program Level: Basic
Prerequisites: Previous training or experience with the fundamentals of accounting, finance, economics, and business writing.
Advanced Preparation: None
Delivery Method: Group Internet-Based
CPE Credits: One (1) Hour
Fields of Study: Finance
Item Number: 14PBV0320
Shipping Weight: 0lbs. 0oz.
Price: $80.00
Program Description

Discounts for lack of marketability/liquidity are attracting considerable attention. The BV profession is being introduced to a number of new techniques for determining and defending discounts. This webinar introduces and differentiates options based methods from the traditional bench-marking approaches. Emphasis is on understanding and correctly applying these methods to develop defensible estimates of discounts.

Learning Objectives

After completing this webinar, attendees will be able to:

- Articulate the reasoning on which option based methods rely
- Identify three option based methods and different assumptions underlying their application
- List the following: look Back Put (Longstaff), Asian Average Put (Finnerty), and Black Scholes Put (Chaffee)
- Differentiate between the risk priced under each method
- Develop appropriate discounts using Abbott formulations

Who Should Attend

Valuation practitioners using discounts for lack of liquidity/marketability


Ashok Abbott, PhD
Dr. Ashok Abbott is a tenured associate professor of finance at West Virginia University in Morgantown, West Virginia. Dr. Abbott received his MBA and PhD in finance from Virginia Tech, Blacksburg, VA. His PhD dissertation was entitled "The Valuation Effects of Tax Legislation in Corporate Sell-Offs."

Dr. Abbott provides analytic and research support to members of legal and valuation community. He has served as an expert witness in state and federal court for depositions, hearings, and trials. His recent assignments include working with S&P, Duff & Phelps, and Willamette Management Associates.

Dr. Abbott's 25 years of experience in academia,16 years of industry experience, and 20 years of litigation consulting experience uniquely qualify him to analyze complex economic issues and develop reasoned opinions to meet the needs of dispute and valuation engagements.

In addition to publishing extensively in scholarly finance research journals, he has presented at national and international finance and valuation conferences. Prof. Abbott's classroom experience allows him to present complex ideas to non-experts in a manner that is both educational and engaging.

Prof. Abbott supports valuation practitioners and litigators with quantitative research, statistical analysis and economic modeling. His statistical capabilities include sampling and research design, testing for statistical significance, modeling and estimation and regression and time series analysis. He works closely with litigation teams, presenting them with his independent analysis of financial and economic data. He also provides a professional critique of the opposing party expert's analysis.

Robert M. Stutz, II, CVA, ASA, CM&AA, CMAP
Mr. Robert Stutz graduated from Butler University with a major in finance and accounting and was a member of Butler's baseball team. Prior to graduation, Mr. Stutz completed two internships: one with Merrill Lynch as a research analyst, and one with Goelzer & Company, an Indianapolis-based investment banking firm. Upon graduation, Mr. Stutz joined Goelzer as a full time valuation analyst, completing several hundred valuations over five years.

Mr. Stutz moved home to Columbus, Ohio, and joined GBQ Partners as director of Valuation Services in 2000. GBQ is Columbus's largest CPA firm. During his tenure at GBQ, he earned his AVA and ASA and grew GBQ's valuation practice to be the largest in the city, doing over 200 projects a year. Mr. Stutz led the acquisition of several valuation practices for GBQ, including Goelzer, his former employer. He also began the merger acquisition practice for GBQ in 2004. In 2005, he was named an equity partner and was eventually put on the firm's executive committee.

Mr. Stutz retired from GBQ in 2010 to pursue a partnership with an investment banking firm where he could more effectively cross-sell large, sell-side engagements that arose continuously from valuation projects. After thorough consideration, Mr. Stutz joined Western Reserve Partners (WRVS), a mid-sized Cleveland, Ohio-based investment banking firm. He was named managing director of the firm's valuation division, Western Reserve Valuation Services. Today, WRVS is a fast-growing valuation firm that is partners with a highly regarded investment bank. WRVS performs complex and high-profile valuation projects primarily for private equity firms, ESOPs, and small cap public companies. All of their projects are corporate finance- and accounting-related. They also have the ability to refer a significant amount of investment banking work to WR.

Mr. Stutz began teaching for NACVA® in 2004 and has instructed hundreds of NACVA participants. He is a primary instructor for the Business Valuation Certification and Training Center and the Mergers & Acquisition Training Center. He has served on several NACVA boards and is currently on the NACVA Executive Advisory Board.