As required in any income approach, an appropriate discount rate for the current technology was determined, where we considered both the implied WACC of the transaction and, more importantly, market-derived discount rates that can be retrieved from literature like Morningstar Inc's SBBI
The one-month Treasury bill rate is from Ibbotson Associates SBBI module and pertains to a bill with at least one month to maturity.
The monthly rate of inflation is from SBBI Yearbook and is not seasonally adjusted.
The pure small stock return is the intercept plus residual in a regression of the small stock return (from Ibbotson Associates SBBI
Yearbook) on the market return.
Ibbotson Associates, 1994, SBBI
1994 Yearbook (Chicago: Ibbotson Associates).
The Ibbotson SBBI Valuation Yearbook is published by Morningstar, Inc.
30% See Ibbotson stock premium SBBI Yearbook 2002 for annual premium returns Small cap stock + 5.
1986, Stocks, Bonds, Bills and Inflation, updated in SBBI
1986 Yearbook (Chicago: Ibbotson Associates).
Yearbook is an essential reference for every financial professional.
Professor Ibbotson will sign a number of yearbooks that will be distributed randomly to people who order the 2004 SBBI