Unsystematic risk in South African privately-owned company valuations
Loading...
Date
Authors
Oberholzer, Merwe
Van Rooyen, Surika
Erasmus, Henro
Journal Title
Journal ISSN
Volume Title
Publisher
Clute Institute
Abstract
The purpose of the study is to determine whether advisory firms valuing privately-owned companies in South Africa take unsystematic risk into account and, if they do, how objectively it is done. A literature search was reviewed and used as a foundation in a questionnaire to gather information from the big four audit, advisory and taxation firms (PricewaterhouseCoopers, KPMG, Deloitte & Touch and Ernst & Young). The study found that unsystematic risk is incorporated into privately-owned company valuations, but that the whole subject of valuations, especially privately-owned company valuations, does not entail entire objectivity. The study further concluded that it is possible to use unsystematic risk as a device to bring the final results of a valuation in line with the clients’ objective. Further research should be done by extending the population to include medium- and large advisory firms and comparing the approaches used by each group.
Description
Citation
Erasmus, H.P. et al. 2012. Unsystematic risk in South African privately-owned company valuations. Journal of applied business research, 28(3):449-462. [http://journals.cluteonline.com/index.php/JABR]