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Category Archives: Beta

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SWS Group: The Breakdown

Posted in Beta, Comparable Companies, Discounted Cash Flow Analysis, Equity Risk Premium, Fair Value, Interest on Appraised Value, Merger Price, Perpetuity Growth Rate, Size Premium

Further to our prior post about Delaware’s two new appraisal decisions, SWS Group was a small, struggling bank holding company that merged on January 1, 2015 into one of its own substantial creditors, Hilltop Holdings.  Stockholders of SWS received a mix of cash and Hilltop stock worth $6.92 at closing.  Vice Chancellor Glasscock rejected the… Continue Reading

Delaware Chancery Again Awards Value Above Merger Price

Posted in Award Premium, Beta, Comparable Companies, Discounted Cash Flow Analysis, Fair Value, Interest on Appraised Value

On July 8, the Delaware Court of Chancery issued its opinion in In re Appraisal of DFC Global Corp.  A financial buyer, Lone Star Fund VIII, acquired DFC Corporation in June 2014 for $9.50 per share in an all-cash deal.  Using a combination of a discounted cash flow analysis, comparable companies analysis, and the merger… Continue Reading

Valuation Basics: Equity Risk Premium and Beta

Posted in Beta, Discounted Cash Flow Analysis, Equity Risk Premium, Fair Value, Valuation Basics, Valuation Expert, WACC

Prior posts in our “Valuation Basics” series have examined the various components of the cost of equity capital under the Capital Asset Pricing Model (“CAPM”). In this post we continue our discussion of those components, focusing on the equity risk premium and its modifying coefficient, the beta. The CAPM has become the Delaware Court of… Continue Reading