2016 Valuation Handbook - Guide to Cost of Capital
Duff & Phelps is now providing the data previously in the SBBI Valuation Yearbook, as well as data from the Risk Premium Report, in this handbook - all to help you estimate the cost of equity capital for a subject company.
This Valuation Handbook contains all of the “key variables in estimating the cost of capital,” including:
- Long-term (20-year) U.S. Treasury Coupon Bond Yield
- Equity Risk Premium
- Long-horizon expected “historical” equity risk premium
- Long-horizon expected “supply side” equity risk premium
- Size Premium
- CRSP Mid-Cap, Low-Cap, and Micro-Cap size premia
- CRSP Deciles 1 through 10 size premia
- Size premia for the breakdown of CRSP Decile 10 into 10a (and its subdeciles 10w and 10x) and 10b (and its subdeciles 10y and 10z)
- Industry Risk Premium
- Industry risk premia (IRPs) for use in the build-up method (previously found in Table 3-5 in the SBBI Valuation Yearbook).
This Valuation Handbook also includes all of risk premia and size premia (for up to eight different measures of “size”) previously published in the Duff & Phelps Risk Premium Report, including:
- Size Study
Analyzes the relationship between equity returns and company size, using up to 8 measures of company size (market value of common equity, book value of common equity, 5-year average net income, market value of invested capital (MVIC), total assets, 5-year average EBITDA, sales, and number of employees).
- Risk Study
Analyzes the relationship between equity returns and accounting-based fundamental risk measures
- High-Financial-Risk Study
Analyzes the relationship between equity returns and high-financial-risk, as measured by the Altman z-Score.
Who Will Benefit
- All accounting and finance professionals working in the area of valuation
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