Thought Leadership

Alternate Valuation Methods in the Era of COVID-19

By:  Daniel R. Van Vleet, ASA, Joseph W. Thompson, CFA, ASA, William P. McInerney, ASA, and David J. Neuzil, CFA, ASA

COVID-19 has grown from an unidentified flu-like illness in Wuhan, China to a global pandemic causing social and economic disruption, a significant downturn in capital markets, and increased market volatility. In this environment, the mechanical application of traditional valuation approaches and methods may produce business values that lack credibility and reliability. Accordingly, it is important that analysts think “outside-the-box” when conducting current business valuations. In this article, we address the impact of COVID-19 on the capital markets and offer alternate valuation methods that should be considered in these turbulent times.

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