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Estimating Long-Term Growth Rates: Ashok Abbott and Roger Grabowski (Webinar Replay).

Updated: Aug 31, 2023

Title: Measuring Long-Term Organic Growth

Topics covered in the webinar:

Constant growth assumptions in estimating terminal value

Combining discounting and capitalising - the two stage model

The three stage model versus the two stage model

The three stage model with gradual changes in growth

Assessment of long run growth rates on value

Nominal versus real measures of growth

Long run growth estimates by industry

Further research to come

About the Speakers:

Ashok B. Abbott is an Associate Professor of Finance at West Virginia University in Morgantown, West Virginia. He has also taught at the Graduate school of Credit and Financial Management held at Dartmouth and Stanford University.

Professor Abbott received his MBA in Finance at Virginia Polytechnic Institute and State University in 1984, which was followed by a Ph.D. in finance also at VPI&SU, in 1987. His Ph.D. dissertation title was "The Valuation Effects of Tax Legislation in Corporate Sell-Offs." Professor Abbott has over twenty years of experience in the evaluation of businesses as a senior bank lender and as a business appraiser. He is a consultant to valuation firms in the areas of DLOL and DLOM (S&P, Duff and Phelps, Willamette). The Small Business Administration recognized Professor Abbott as the Small Business Advocate-Journalist for the year 2002.

Professor Abbott has received frequent recognition and awards for his teaching including Best Teacher Award College of Business 1993, Best Teacher Award Division of Economics and Finance 1995, and Lifetime Investment Award given by the Executive MBA graduating class of 1999. He has published extensively in scholarly research journals and made presentations at national and international conferences.

Roger J. Grabowski, FASA is a managing director in Kroll’s Valuation Advisory Services practice.

Prior to joining Kroll, Mr. Grabowski was a managing director at Standard & Poor’s Corporate Value Consulting practice, a partner at PricewaterhouseCoopers LLP and at one of its predecessor firms where he founded its U.S. Valuation practice and managed the Real Estate Appraisal practice.

Mr. Grabowski has testified in court as an expert witness on various valuation matters. His testimony in the U.S. District Court was referenced in the Supreme Court’s landmark Newark Morning Ledger opinion, allowing amortization of customer-based intangible assets. His use of the discounted cash flow (DCF) method and the modified capital asset pricing model (MCAPM) for estimating the cost of capital for operating businesses was accepted by the U.S. Tax Court in the Northern Trust Company decision; this was the first time that the Tax Court accepted the DCF method and the MCAPM in valuing a closely held business.

Mr. Grabowski is a co-developer of the annual Risk Premium Report – Size and Risk Studies for estimating cost of equity capital (available via the Kroll Cost of Capital Navigator).

He has authored and coauthored several books and numerous papers. He is the contributing author of Chapter 17, “Discounts Rates in Theory,” in Lost Profits Damages: Principles, Methods and Applications 2nd. ed.; a contributing author and co-editor of Shannon Pratt’s Valuing a Business – The Analysis and Appraisal of Closely Held Companies 6th ed.; he is co- author of Valuation Handbook-International Guide to Cost of Capital: 2021 Summary Edition, The Lawyer’s Guide to Cost of Capital, and Cost of Capital: Applications and Examples 5th ed.

Among papers, he authored are “Cost of Capital Estimation in The Current Distressed Environment,” The Journal of Applied Research in Accounting and Finance, 4 (1) (July 2009). 31 – 40; and “Comparing Growth Rates Used in Discounted Cash Flow Valuations” (Business Valuation Review). He is former Editor of the Business Valuation Review.

Mr. Grabowski is a Fellow of the ASA (FASA), its highest distinction, accredited in business valuation. In 2022, the ASA awarded Mr. Grabowski the Special Recognition Award in memory of Shannon Pratt and in 2023, the ASA awarded him their Life Achievement Award.

Watch the Recording by clicking the button below.

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