Academic research often categorizes the size effect as simply an anomaly,
created by incorrect measurements of beta, for example, and that the size effect
contradicts the underlying assumptions of the Capital Asset Pricing Model. The
panel will explore: 1) the problems created when academics measure size as
market value of equity; 2) the issues created given that the size effect is
cyclical and keeps returning; 3) research that indicates that the size effect
continues to appear after correcting for data issues raised; and 4) whether the
size effect is simply a liquidity effect and whether that makes a difference in
valuing a closely-held business.
We will discuss the risks of small businesses compared to those of large
businesses and the relationship of business size and other fundamental risk
measures. We will discuss whether one should be using a changing size premium
given the projections used in the valuation.
These sessions are available ONLINE ONLY. This PDF
and MP3 downloads will be available for 3 days
after the purchase date. Please download