Featuring Nancy J. Fannon, ASA, MCBA, CPA, ABV, BVAL of Fannon Valuations
Telephone Dial-In Audio Conference
Tuesday, November 13, 2007
10:00am -11:40pm Pacific Time
Register for Conference and TC Pack for $339
BVR is going green and saving you money! The new TC Pack is a CD that includes audio recording, e-transcript (in PDF), conference presentation,and all ancillary reading materials for which BVR holds the copyright. This new product is even more valuable for our attendees – as well as for those who can’t make the session!
Register today and take advantage of this special offer:
Presented by Business Valuation Resources, LLC. Earn TWO INTERACTIVE CPE credits for participating in this conference. Only $249.00 for a single dial-in connection. Use your conference room and the whole office can listen in. Two CPE credits are available for each additional listener sharing the same phone connection for only $49.00 per person.
Why Should You Attend?
S corp valuation has eluded and frustrated analysts for years. On the one hand, both public and private C corporations and S corporations pay taxes on income, the former at the corporate level and the latter at the shareholder or “pass through” level. On the other hand, the S corp shareholders avoid a “second level” of tax—a tax on corporate dividends. This should mean, all things being equal, that S corps are more valuable to the investor than C corps.
At the same time, some transaction data studies indicate that S and private C corporations sell for similar prices in the marketplace. How can that be, when the S corp shareholder receives the benefit of single taxation? While these questions have existed for years, they took on added significance since the controversial decisions by the U.S. Tax Court, beginning with Gross v. Commissioner. These cases ignited the debate regarding how to properly value S corporations, and analysts have been caught in the swirl ever since.
Join this teleconference with expert Nancy Fannon to hear what you need to know to bulletproof your S Corp valuations – and how to make sense of the S Corp discourse that implies this issue is still in flux when in reality it does not have to be.
- Learn what the S Corp “debate” has been all about
- Review the mechanics of the traditional and simplified models
- Discuss S corp. valuation in the context of methods other than the income approach
- Discuss minority versus control—are the income and market transaction data really at odds?
S Corporation Valuation: It Ain’t Over Yet (in fact it just started) Presentation:
- The Issues
- The Basics: Cash Flow and Risk—Income Approach
- Cash Flow and Risk—Market Approach
- Even net asset value is about cash flow and risk
- Cash Flow and Risk—Let’s stick with income approach
- Rate of Return for C corporations, borrowed from the public markets
- Now let’s take it down to the individual level…
- Now we can use the individual rate from the public market to value the S corp.
- Now you know how to value an S corporation
- Delaware Chancery Court – De. Open MRI
- DE Chancery case with one little tweak . . .
- Van Vleet’s method?
- Distributions v. Retention
- Simplified Model
- S corporation valuation, contrasted with C corporation valuation
- Underlying Concepts
- The heart of the S Corp Debate
- We’re stuck with a mismatch between Rate of Return
and Cash to Investor
- What does this have to do with how we value the S Corp using the income approach?
- Basic facts for a publicly traded C Corporation investor
- “The Basic Value Calculation” Examples
- Clearly, we have a benefit compared to the public C, who’s ROR we’ve used. How to account for it?
- Let’s see if this “works”
- Why don’t the I.R.S. and the tax court decisions work?
- Funny Money?
- This is the “theory behind the models”
- What if profits aren’t distributed?
- Major Benefits of S Corporation Ownership
- How do the models work? Review of Models:
- Grabowski—C Corp Equivalent: avoided dividend only
- Comparison to Other Grabowski Methods
- Van Vleet
- S Corp Models
- Note in particular
- Excel Summary
- Simplified Model
- Now…what about all those studies comparing C and S corporations?
- Early studies…
- So what do we have here?
- Series of Studies comparing S v. C corps
- “Noise” in the transaction studies
- What do we know about the differences between S and private C corps?
- Pratt's Stats™
- S Corps v. C Corps in the databases
- Loop back to the market approach
- Remember the very simple thing we’re trying to achieve here
CPE Credit Information
2 Interactive CPE Credits (Consulting Services)
Please note: To receive CPE credit, you must fill out the post conference survey. The survey link is e-mailed to participants along with the dial-in number and registration code, normally sent two or more days prior to the conference. CPE credit only registrants will be sent the survey link via e-mail.
For more information on this telephone conference or our past telephone conferences, please email firstname.lastname@example.org Business Valuation Resources offers a 100% money-back guarantee. If you are not completely satisfied, you may submit a written request within 30 days of the date of this program to receive a full refund. Please e-mail our accounting manager at: email@example.com . There are no fees associated with refunds.