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Capitalization Rates in Divorce Cases: Facts vs Fiction

Business decision-makers are continually performing cost/benefit analysis as they manage firm operations. At the heart of this analysis is the cost of capital, which captures the cost of funds from the issuance of debt and/or equity. In the simplest terms, if a project does not yield a return that exceeds the cost of capital, the project is a net destroyer of firm value. This course will discuss foundational cost of capital concepts, cost of capital formulas, and data sources that serve as inputs for cost of capital calculations. 

Understanding the fundamental concepts in this course will help attorneys and CPAs assess inputs (i.e., risk rates, growth rates, expected returns) that flow into valuation/economic models used by experts in litigation. For example, in divorce cases, property division can hinge on the capitalization rate used by an appraiser. This presentation will provide attorneys and CPAs with the knowledge for effective cross-examinations, depositions, expert testimony engagements, and accounting/legal practice management. 

Learning Objectives:

• Examine cost of capital concepts and sources of data
• Calculate the cost of capital
• Integrate both theoretical perspectives and practical applications
• Review how the discount rate influences asset valuations
• Discuss cross-examination questions for opposing expert witnesses

Presenters:

William Kline, Ph.D., CFA

William Kline, Ph.D., CFA is an Assistant Professor of Management at Pennsylvania State University - Harrisburg. He received his Ph.D. in Strategic Management from the Fox School of Business at Temple University. He has received four awards for teaching excellence including the Beta Gamma Sigma Professor of the Year Award (PSU – Harrisburg), the Dean’s Award for Faculty Excellence and Stanley Fuchs Award (Fordham University), and the Award for Excellence in Teaching by a Doctoral Candidate (Temple University).

Dr. Kline’s primary research interests include strategic decision-making and executive compensation. He has been published in 12 peer-reviewed journals including the Journal of International Management, Academy of Management Perspectives, and the Journal of Strategy & Management. 

Prior to entering academia, Mr. Kline was a manager at PricewaterhouseCoopers where he completed valuations for mergers and acquisitions, business planning, as well as tax and financial reporting. Mr. Kline also spent time consulting at CBIZ Valuation Group, Inc. and Curtis Financial Group, a regional investment bank.

Lee Sanderson, CPA, ABV, CFF, CVA, MST

Lee D. Sanderson, CPA, ABV, CFF, CVA, MST is a financial professional and business owner. He is the Founder of Valuation Forensics, LLC where he specializes in business valuation, forensic accounting, expert testimony and tax consulting nationwide. He is frequently appointed directly by the Courts to serve as the Court's independent expert on valuation and forensic matters. In addition, he owns a Certified Public Accounting firm that works with business owners and individuals providing tax consulting.

Lee has been active in the business valuation and the start-up world for over 25 years and is passionate about education and entrepreneurship. He works with a variety of organizations to help them launch, grow and build business value. Lee provides seminars on business valuation and forensic accounting to attorneys and judges, participates as a guest speaker at legal conferences and volunteers as an instructor for continuing legal education. 

Adam T. Magill MBA, CBA, CVA, MAFF

Adam is a practical-orientated financial expert who enjoys creative problem-solving in both seemingly simple and complex cases. He tackles challenges head-on while maintaining a high level of prudence. In addition, Adam’s work history in business valuations, public accounting, private accounting, financial planning, investment banking, and as a broker enable him to offer insights and creative solutions to every case.

Adam is a Certified Valuation Analyst (CVA) and a Master Analyst in Financial Forensics (MAFF) through the National Association of Valuation Analysts (NACVA). He is also a Certified Business Appraiser (CBA) through the Institute of Business Appraisers (IBA). Adam has advanced training and expertise in collaborative law cases; he is the past treasurer/officer and current webmaster of the Florida Academy of Collaborative Professionals (FACP), a past board member of the Collaborative Family Law Group of Central Florida, and a member of the International Academy of Collaborative Professionals (IACP).

About CPE/CLE:

* The ALA partners with McDevitt and Kline LLC for certificate issuance. Live, internet-based courses are approved as Distance Learning courses by the PA Supreme Court CLE Board. For additional information, please visit http://www.pacle.org/. Check with your State CLE Board for rules pertaining to live webcasts. These rules differ from state to state. For example, PA attorneys may earn up to 6 CLE credits per compliance period via live webcasts (or 6 out of 12 credits per year); NJ and DE attorneys may earn up to 12 CLE credits per compliance period via live webcasts (or 12 out of 24 credits per two years).

This course has not yet received California State Bar approval.  An application requesting MCLE credit for this activity is pending for approval by the State Bar of California.

McDevitt & Kline, LLC is registered with the National Association of State Boards of Accountancy (NASBA), as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN, 37219-2417. Web site:www.nasba.org.

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