Appraisal Standards, Chapters, Fairness Opinions, Litigation, Valuation Cases

How Courts View Cost of Capital- Appraisal and Fairness Cases (2014)

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By Gilbert E. Matthews, CFA, Sutter Securities, Inc. (San Francisco, Calif., USA)

The cost of capital is a central issue in business valuations in statutory appraisal, stockholder oppression, and “entire fairness” cases. The Delaware courts have set the standards for valuations related to corporate disputes because Delaware law is widely accepted on corporate legal issues. This section primarily discusses Delaware Courts of Chancery and Delaware Supreme Court opinions involving the discounted cash flow (DCF) method and its crucial component, the cost of capital.

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