Valuation of Closely-Held Firms: Another Look

For the most part, closely-held firms must be valued using proxies for market data which are not available. Valuation approaches described in the literature are used by practitioners with exceptions demanded by circumstances. Results of the survey confirm statements of others that substantial discounts for non-marketability and minority interest are usually appropriate

Theory and computation of directional nematic phase ordering

A computational study of morphological instabilities of a two-dimensional nematic front under directional growth was performed using a Landau-de Gennes type quadrupolar tensor order parameter model for the first-order isotropic/nematic transition of 5CB (pentyl-cyanobiphenyl). A previously derived energy balance, taking anisotropy into account, was utilized to account for latent heat and an imposed morphological gradient in the time-dependent model. Simulations were performed using an initially homeotropic isotropic/nematic interface. Thermal instabilities in both the linear and non-linear regimes were observed and compared to past experimental and theoretical observations. A sharp-interface model for the study of linear morphological instabilities, taking into account additional complexity resulting from liquid crystalline order, was derived. Results from the sharp-interface model were compared to those from full two-dimensional simulation identifying the specific limitations of simplified sharp-interface models for this liquid crystal system. In the nonlinear regime, secondary instabilities were observed to result in the formation of defects, interfacial heterogeneities, and bulk texture dynamics.Comment: first revisio

Site Index Prediction for Willow and Cherrybark Oaks in East Texas Bottomland Forests

Estimating site quality for a specific tree species is an important tool in forest management. While intensively managed pine species are often the focus of site quality studies using site index, hardwood species found in bottomland hardwood sites are often lacking in quality growth prediction equations. Two valuable hardwood species, willow oak (Quercus phellos) and cherrybark oak (Q. pagoda), are of interest for forest managers of east Texas bottomland sites. The objective of this study was to develop site index prediction equations and curves for these two species. Using height and age data from 267 cherrybark oaks and 460 willow oaks collected from sites across east Texas, remarkably similar equations were developed, with coefficient of determination (R2 ) of 0.63 for cherrybark oak and 0.52 for willow oak

Corporate Governance, Illiquidity, and Valuation Issues in Privately-Owned Corporations

Investors in private corporations face unique problems relating to corporate control, illiquidity and valuation of securities. In this research, we survey a large sample of US corporations. Our sample includes both private and public firms. Major findings of our research are as follows: Private firms use written shareholder agreements for safeguarding ownership interests and dividend payments. Family owned firms dominate the ownership structure of private firms. Insiders of private firms own a much larger proportion of common stock than insiders in public firms, and the CEOs of private firms often happen to be the largest stockholders

Annihilation of edge dislocations in smectic A liquid crystals

This paper presents a theoretical study of the annihilation of edge dislocations in the same smectic plane in a bulk smectic-A phase. We use a time-dependent Landau-Ginzburg approach where the smectic ordering is described by the complex order parameter psi( r--> ,t) =eta e(iphi) . This quantity allows both the degree of layering and the position of the layers to be monitored. We are able to follow both precollision and postcollision regimes, and distinguish different early and late behaviors within these regimes. The early precollision regime is driven by changes in the phi ( r--> ) configuration. The relative velocity of the defects is approximately inversely proportional to the interdefect separation distance. In the late precollision regime the symmetry changes within the cores of defects also become influential. Following the defect collision, in the early postcollision stage, bulk layer order is approached exponentially in time. At very late times, however, there seems to be a long-time power-law tail in the order parameter fluctuation relaxation

Sources of Capital and Debt Structure in Small Firms

In this paper we examine the relationship between ownership differences and small firms’ financial policies using a survey of U.S. companies. The study finds that financial policies differ according to the type of ownership (private versus public) and by the ownership differences (family-owned, closely-held, or widely-held) within the private firms. The differences are in the ownership concentration, relative importance of various sources of capital, debt characteristics (sources of debt financing, debt maturity, and debt cost). A multiple regression equation estimated in the paper provides evidence relating to cross-sectional variations in debt ratios of small firms. The paper offers information asymmetry, illiquidity, and agency cost explanations for the observed differences in ownership and financial policies of small firms

Use of Debt Covenants in Small Firms

This paper examines the structure of debt covenants in small firms, with emphasis on privately owned firms. It is based on a survey of a large sample of firms drawn from the S&P Register of Corporations. The findings show that debt covenants imposed on small firms differ according to the firm type (privately owned or publicly owned), debt level, the borrowing cost, and the source of financing (bank or other sources). The evidence is generally consistent with the arguments relating to stockholder-bondholder agency cost conflicts and the Costly Contracting Hypothesis of Smith and Warner (1979)