Cost of Capital

Cost of Capital, Fifth Edition: Applications and Examples Cost of Capital is published with updated authoritative text, applications, workbook examples and cases, a technical supplement, and website. Completely revised for this highly anticipated fifth edition, there are expanded materials on estimating the basic building blocks of the cost of equity capital, the risk-free rate, and equity risk premium. There is an expanded discussion on the volatility created by the financial crisis in 2008, the subsequent recession and uncertain recovery, and how those events have fundamentally changed how we need to interpret the inputs to the models we use to develop these estimates. Cost of Capital includes new case studies providing comprehe sive discussion of cost of capital estimates for valuing a business and damages calculations for small and medium-sized businesses, cross-referenced to the chapters covering the theory and data. Teeming with new quotes and citations to relevant material from the leading authorities on capital valuation, the new edition includes updated discussion of the following issues: Equity risk premium and the risk-free rate, including the impact of Federal Reserve actions How to use Morningstar's Ibbotson and Duff & Phelps Risk Premium Report data Criticisms of CAPM and reasons why multiple procedures should be used in developing discount and capitalization rates Global cost of capital estimation, including a new size study of European countries Adjusting discount and capitalization rates for different measures of economic income, including pretax discount rates Cost of Capital: Applications and Examples puts an emphasis on practical application. To that end, this updated fifth edition provides readers with exclusive access to a companion website filled with supplementary materials, allowing you to continue to learn in a hands-on fashion long after closing the book.