April 2014
Intermediate to advanced
1344 pages
44h 24m
English
book
Cost of Capital: Applications and Examples, + Website, 5th Edition
by Shannon P. Pratt, Roger J. Grabowski, Richard Brealey
Content preview from Cost of Capital: Applications and Examples, + Website, 5th Edition
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CHAPTER 19
Using the Duff & Phelps Risk Premium Report Data1
James P. Harrington
History of the Risk Premium Report
Data Sources and Companies Included
Size Study and Risk Study Portfolios
Appendix 19A: Examples Using the Duff & Phelps Risk Premium Report Data
INTRODUCTION2
The Duff & Phelps Risk Premium Report (the Report) can be used to develop cost of equity capital estimates using both the build-up method and the capital asset pricing model (CAPM).
The Duff & Phelps Risk Premium Calculator (the Calculator) is a web-based companion tool for calculating the cost of equity using data as published in the Risk Premium Report.3 While all the examples in this chapter can be done by using the online Calculator, it is important for the valuation professional to read and understand the information in this chapter (and the full Report).
All data used in the Report and online companion, the Calculator, are derived from publicly traded stocks and, as such, any cost of capital estimates are as if the subject company were publicly traded.
The Risk Premium Report is designed to assist financial professionals in estimating the cost of equity capital for a subject company.
HISTORY OF THE RISK PREMIUM ...
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I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.