Adoption Of Extended M&A Valuation Models Seems Unlikely

By Nicholas Walter (September 8, 2021, 5:32 PM EDT) -- In a recent Law360 guest article, Bradford Cornell, a prominent valuation consultant, suggests that courts conducting appraisals of companies' stock should use extremely long-term projections — "25 years or more" — in discounted cash flow models.

To this litigator, who has some familiarity with appraisal law, Cornell's suggestion appears unworkable on its face. I am highly doubtful that any court would, or should, ever adopt such a proposal.

Cornell and his colleague, Richard Gerger, start by noting a common feature — they might say bug — of discounted cash flow models: They typically rely on three to five years of projections,...

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