My partner received the following query from an attorney - anyone do this type of work?
"I am looking for a valuation of the fees to be paid by a lab to a consultant who provides several different types of services some of which include marketing.
The parties want to be able to have some flexibility for some of the components rather than a fixed fee. We want to make sure it is fair market value and does not raise EKRA/AKS concerns."
Let me know -
Sharyn
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All:
George Young and I have made substantial revisions to the SSRN paper available at the link below. It is much improved.
https://ssrn.com/abstract=6616298<https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fssrn.com%…>
Some new highlights you might be interested in:
* Table 2, Panel B. In the earlier version, I had a coding error that formed the 10A/B/W/X/Y/Z portfolios monthly instead of annually each July 1 Annual sorts follow the literature (cf. Fama and French). The returns look more conventional compared to the practice literature.
* Table 4. Low-price stocks ($5 per share), sometimes called penny stocks, contribute higher returns in 10Z. When these stocks are removed, 10Z returns are lower than 10Y returns.
* Table 11. There are more unprofitable firms in 10Z than profitable ones. Also, the ratio of unprofitable to profitable firms increases monotonically from 10W to 10Z.
* Table D.1 (p. 97 of the paper). Overall, the unhealthy financial ratios of 10Z are concentrated in the penny stocks (< $5 a share).
* Table I.1. Delistings for performance are concentrated in 10Z firms.
I believe this provides strong evidence against using a 10Z size premium.
Dr. Michael A. Crain, CPA, CFA, ABV, CFE
This is just a test to see if I can post again.
Ron
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