Resumen de Valuation in Brazil in the last 20 years: An analysis of the premises adopted in the takeover bid assessment reports

Fabiano Guasti Lima, Alexandre Assaf Neto, Rafael Confetti Gatsios, Jardel Chaves Costa

• Purpose: An assessment report involves defining and adopting each premise for the valuation method used. In the core of the assessment, solid premises are crucial to ensure that the resulting value is representative of the reality imposed in the evaluation. This research aimed to analyze whether the values adopted in the projection premises align with the actual values over time.

    Design/Methodology/Approach: Twelve (12) essential premises commonly used in assessment reports were considered. The unique aspect of this study is its focus on all takeover bid reports available at the Securities and Exchange Commission of Brazil over the last 20 years.

    Findings: The main results indicate that 50% of the analyzed premises exhibited some form of bias, predominantly an increase in the projected values compared to the actual values obtained. These findings were statistically proven through hypothesis tests for paired values.

    Research, Practical & Social Implications: This research not only aims to contribute to the professional development of those involved in constructing assessment reports but also encourages future studies to focus on analyzing the quality of the premises used and their sources. This will allow for the continuation of such research, considering the growing interest in this type of study within the academic community.

    Originality/Value: It was found that the projected premises are more stable than their actual values obtained subsequently.