2017 Valuation Handbook - U.S. Guide to Cost of Capital (Wiley Finance) - Hardcover

Grabowski, Roger J.; Nunes, Carla; Harrington, James P.; Duff & Phelps

Hardcover

ISBN 10: 1119367123 ISBN 13: 9781119367123

Publisher: Wiley, 2017

Synopsis

Ensure that you're using the most up-to-date data available: Buy the 2017 Valuation Handbook – U.S. Guide to Cost of Capital + Quarterly PDF Updates together!

The New Industry Standard in Business Valuation Reference Materials

2017 Valuation Handbook – U.S. Guide to Cost of Capital provides the key annual valuation data previously published in (i) the now discontinued Morningstar/Ibbotson SBBI Valuation Yearbook (discontinued in 2013), and (ii) the Duff & Phelps Risk Premium Report Study (no longer published as a stand-alone publication).

The size premia data previously published in the SBBI Valuation Yearbook is referred to as the "CRSP Deciles Size Premia" exhibits in the new 2017 Valuation Handbook – U.S. Guide to Cost of Capital, while the size and risk premia data published in the Duff & Phelps Risk Premium Report Study has been published annually since 1996 and, like the former SBBI Valuation Yearbook, provides data and methodology that can be used to develop cost of equity capital estimates using (i) the build-up method and (ii) the capital asset pricing model (CAPM).

The 2017 Valuation Handbook – U.S. Guide to Cost of Capital includes data through December 31, 2016, and is intended to be used for 2017 valuation dates.

For more information about Duff & Phelps valuation data resources published by Wiley, please visit www.wiley.com/go/valuationhandbooks.

Also Available

• 2017 Valuation Handbook – U.S. Industry Cost of Capital
• 2017 Valuation Handbook – International Guide to Cost of Capital
• 2017 Valuation Handbook – International Industry Cost of Capital

Key Features

• Key cost of capital inputs: The 2017 Valuation Handbook – U.S. Guide to Cost of Capital provides the key inputs needed for developing the cost of equity capital (i.e., "discount rate") for use in estimating the value of a subject business, business ownership interest, security, or intangible asset. Inputs provided include: equity risk premia, size premia, risk premia over the risk free rate, full-information industry betas, industry risk premia, and the risk-free rate.
• Discussion of topics that come up most when performing valuation analysis: The 2017 Valuation Handbook – U.S. Guide to Cost of Capital includes straightforward discussions about: (i) valuation theory, (ii) the differences between the various cost of capital estimation models (build-up, CAPM, Fama-French), (iii) understanding the basic building blocks of cost of equity capital (the risk-free rate, the equity risk premium, the size premium, beta, the industry risk premium, the company-specific risk premium), (iv) whether to "normalize" risk-free rates or not, (v) a detailed comparison of the CRSP Deciles Size Premia Study (the former SBBI Valuation Yearbook data) and the Risk Premium Report Study, and more.
• Easy-to-follow examples: The 2017 Valuation Handbook – U.S. Guide to Cost of Capital is packed with easy-to-understand examples for properly using the data to develop levered, unlevered, and even "high-financial-risk" cost of equity capital estimates using various build-up methods and CAPM.

About this title

About the Author

Roger J. Grabowski is a managing director with Duff & Phelps. He is coauthor of Cost of Capital – Applications and Examples, Fifth Edition, The Lawyer's Guide to Cost of Capital, and Cost of Capital in Litigation.

James P. Harrington is a director at Duff & Phelps. He is a leading contributor to Duff & Phelps' efforts in the development of studies, surveys, online content and tools, firm-wide valuation models, data distribution platforms, and published thought leadership. He is a coauthor of the Duff & Phelps "Valuation Handbook" series, a contributing author to Cost of Capital – Applications and Examples, Fifth Edition, and a Duff & Phelps contributor to the Stocks, Bonds, Bills, and Inflation (SBBI) Yearbook.

Carla S. Nunes is a managing director in the Office of Professional Practice at Duff & Phelps, where she provides firm-wide technical guidance on a variety of valuation, financial reporting, and tax issues, with a particular focus on cost of capital. She is a coauthor of the Duff & Phelps "Valuation Handbook" series and a contributing author to Cost of Capital – Applications and Examples, Fifth Edition.

From the Back Cover

EVERYTHING YOU NEED FOR ACCURATE COST OF CAPITAL ESTIMATIONS IN A SINGLE VOLUME

The 2017 Valuation Handbook U.S. Guide to Cost of Capital is part of the international series of valuation resources authored by Duff & Phelps and published by John Wiley & Sons. This annually-updated reference provides business valuation and finance professionals with the critical data they need to measure company risk and cost of capital.

Gauging the risks of an investment is one of the trickiest aspects of finance. This comprehensive guidebook gives you two of the most important data sets in the industry, along with the ability to:

• Turn to a definitive resource of world-class data and guidance to gain a distinct competitive advantage in real-world situations.
• Use the most up-to-date data available, including rate of return figures adjusted to fix the skew shown in other studies on equity risk premiums.
• Quickly grasp how concepts and methodologies translate into actual practice when they are brought to life in exemplifying cases.

Accurate. Reliable. Trusted. The 2017 Valuation Handbook U.S. Guide to Cost of Capital gives you an upper hand the moment you open it.

Other volumes in the annual series include:

• 2017 Valuation Handbook U.S. Industry Cost of Capital
• 2017 Valuation Handbook International Guide to Cost of Capital
• 2017 Valuation Handbook International Industry Cost of Capital

From the Inside Flap

Every investment decision requires at least two inputs an estimate of future net cash flows and a cost of capital estimate with which to discount the net cash flows. Properly estimating the cost of capital requires matching the risks associated with the expected net cash flows with the appropriate discount rate. The 2017 Valuation Handbook U.S. Guide to Cost of Capital is the definitive source of accurate, reliable, and timely cost of capital data.

Estimating the cost of capital for business valuation, capital budgeting, feasibility studies, and merger and acquisition decisions is more difficult than ever before. Fortunately, the premier global valuation and corporate finance advisor, Duff & Phelps, has streamlined the process in this single-source guide to correctly calculating the cost of capital with authoritative data and methodologies.

The 2017 Valuation Handbook U.S. Guide to Cost of Capital is the fully updated annual reference for corporate executives, CPAs, valuation professionals, judges and attorneys, and everyone else who needs accurate, authoritative, and timely information for determining the cost of equity capital. This comprehensive resource puts the critical valuation data previously published in the Ibbotson® Stocks, Bonds, Bills, and Inflation® (SBBI®) Valuation Yearbook and the Duff & Phelps Risk Premium Report in one location.

Part of the Duff & Phelps series of annual valuation resources, this publication provides the critical data and guidance you need to confidently develop cost of capital estimates, including:

• The key data inputs for developing discount rates: (i) equity risk premia, (ii) size premia, (iii) risk premia over the risk-free rate, (iv) full-information industry betas, (v) industry risk premia, and (vi) risk-free rates
• Practical, easy-to-read discussions on valuation theory, including insightful discussions about the basic building blocks of cost of capital, the pros and cons of the various cost of capital estimation models, how to handle risk-free rates in an era of massive central bank monetary policy interventions, and more
• Detailed, easy-to-follow examples for properly using (i) various "build-up" methods, and (ii) the capital asset pricing model (CAPM) to develop reliable levered unlevered, and high-financial-risk cost of equity capital estimates

The 2017 Valuation Handbook U.S. Guide to Cost of Capital is your accurate, reliable, and trusted resource for estimating the cost of equity capital.

Edition details

• Publisher: Wiley
• Publication date: 2017
• Language: English
• ISBN 10: 1119367123
• ISBN 13: 9781119367123
• Binding: Hardcover
• Edition number: 1
• Number of pages: 400