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This document from the ABI Journal in April 2024 provides valuable information for library patrons conducting research on how to determine the value of intellectual property (IP). It explains that valuing IP, particularly patents, can be more challenging than valuing tangible assets, but the principles are generally the same. The document outlines three methodologies for valuing patents: the income approach, the market approach, and the cost approach. It also discusses specific approaches within the income approach, such as the discounted cash flow method, the venture capital method, and the relief-from-royalty method. Additionally, the document includes a table of four comparable agreements, showing the royalty rates for different types of intangibles. [Extracted from the article]

The quality of analyst recommendations and the conflicts of interest associated with those recommendations have received significant attention recently in the media. Yet, there has been relatively little analysis in [...]

This article analyzes the investment characteristics associated with firms emerging from bankruptcy. Specifically, it asks whether the stock market differentiates between those companies emerging successfully from bankruptcy and those emerging [...]

The importance of information technology (IT) in the acquisitions process is underscored. In the 1990s, corporate acquisitions and mergers are increasingly becoming more complex, due to challenges posed by globalization, local competition, short product life-cycles, rapid innovation, environmental considerations and public regulations. Studies have indicated that while gains from acquisitions accrue to shareholders of the acquired firms, the benefits to acquiring partners are not as clear-cut and the above factors contribute to inevitable difficulties. Because IT is essential not only in administrative functions but also on operational procedures, the evaluation of a potential acquisition's IT capabilities is essential in order to identify its contribution in terms of systems and information, its corresponding value in terms of negotiation price and the difficulties involved in integrating the two systems.

With the increasingnumber of junk bond defaults, it may be worthwhile for institutions to consideravenues for recovering funds from junk bond losses. Any party seeking to recover funds from junk bond defaults must consider both a financial and a legal checklist of issues. The authors present a step-by-step plan for mountingan effective claim. (Reprinted by permission of the publisher.)

Generally, the market approach consists of analyzing comparable publicly traded companies that are reasonably comparable to the subject company ("CompCo"), and comparing actual transactions of similar businesses to the subject company ("CompM&A"). Whether it is valuing a company during COVID-19 or other abnormal events within a finite period, it is essential for a valuation professional to determine to what extent the subject company's cash-flow projections reflect the impact of the abnormal event. The subject company's enterprise value can then be determined by applying the multiples of the peer companies to the operating metric of the subject company. The subject company's enterprise value can be determined by applying the multiples of the transactions to the subject company's operating metric. [Extracted from the article]

The acquisition activities of four firms are highlighted to demonstrate that although acquired companies' stockholders tend to earn significant premiums, gains to the acquiring entities are much more doubtful. The four acquiring companies are: Exxon, Midland Bank PLC, General Host, and Millipore, which respectively acquired Reliance Electric Co, Crocker National Bank, Cudahy, and Chemetrics. The typical merger attempts to develop corporate synergy, but the cost of obtaining the synergy is often higher than the synergy gained; hence the 'winner's curse'. Cases of 'pure' and 'zero gain' winner's curses are provided. Winner's curse is unlikely to occur when mergers are horizontal, when targets are privately held, when the acquiring firm has information advantages, when the takeover target is an 'ugly duckling', when tax loss is carried forward, or when there is diversification.

The effects of trucking deregulation on carriers' shareholders are investigated through an event study methodology. Expected and actual returns during a period surrounding a particular event are compared, with differences referred to as prediction errors. The prediction errors investigated are tied to individual trucking companies, and with groups consisting of regional, national, and aggregate samplings. Study results suggest that the July 1980 passage of the Motor Carrier Reform Act ended a serious 18-month decline in the aggregate sample's cumulative prediction error. Nearly all firms demonstrated substantial gains during the 18 months following deregulation. Study of two control groups reveals that a large portion of this industry sample gain is associated with reduced and more stable fuel prices and a sharp economic upturn.

The effects of airline deregulation on airline creditors is examined. The insolvency probabilities for airlines before and after deregulation are calculated. The results indicate that the financial condition of most airlines has not been affected by deregulation, although the condition of some airlines has deteriorated due to deregulation.