2016 International Valuation Handbook - Guide to Cost of Capital

The New Standard Source of International Cost of Capital Analysis

The 2015 International Valuation Handbook – Guide to Cost of Capital provides data and methodology guidance that will enable the reader to assess risk and develop cost of capital estimates on a global scale, coupled with data exhibits that provide country-level country risk premia (CRPs), Relative Volatility (RV) factors, and equity risk premia (ERPs). The data exhibits can be used to estimate country-level cost of equity capital globally, for up to 188 countries, from the perspective of investors based in up to 55 different countries.*

The 2015 International Valuation Handbook – Guide to Cost of Capital is published in June 2015, with data through December 2014 and March 2015. The optional September Semi-annual Update is also available, with data through June 2015 and September 2015.

Key Features

• Country-level Country Risk Premia (CRPs) for up to 188 countries: The 2015 International Valuation Handbook – Guide to Cost of Capital provides country-level country risk premia for up to 188 countries globally, from the perspective of investors based in up to 55 different countries. CRPs are estimated using the following models: (i) Country Credit Rating Model, and (ii) Country Yield Spread Model.
• Relative Volatility (RV) Factors for up to 69 countries: The 2015 International Valuation Handbook – Guide to Cost of Capitalprovides country-level relative volatility factors for up to 69 countries from the perspective of investors in the U.S. and Germany. Relative volatility factors are estimated using the Relative Standard Deviation Model.
• Equity Risk Premia (ERPs) for 18 countries based in USD and “local” currency:The 2015 International Valuation Handbook – Guide to Cost of Capital provides long-horizon and short-horizon ERP data in USD and “local” currencies. Additional ERP resources include Pablo Fernandez’ survey of ERPs for a variety of counties.

*Depending on the estimation model being employed, and data availability. Some models do not include estimates for all countries.

Roger J. Grabowski, Managing Director of Duff & Phelps LLC, is a major speaker at conferences and has testified in court as an expert witness on the value of closely held businesses and business interests, matters of solvency, valuation and amortization of intangible assets and other valuation issues. He testified in the Northern Trust case, the first U.S. Tax Court decision that adopted the discounted cash flow method to value the stock of a closely-held business with the discount rate based on the capital asset pricing model. Roger authors the annual Duff & Phelps' Risk Premium Report.

James P. Harrington, Director in the Office of Professional Practice at Duff & Phelps, is an accomplished financial writer and analyst. He provides technical support on client engagements involving cost of capital and business valuation matters, and leads efforts for development of Duff & Phelps' studies, surveys, online content and tools, and internal models. He is also the co-developer of the online Duff & Phelps Risk Premium Calculator, which is based on the data and methodology of the Duff & Phelps Risk Premium Report. Prior to joining Duff & Phelps, Harrington was the Director of Valuation Research in Morningstar's Financial Communications Business, leading the group that produces the widely used and cited Ibbotson SBBI Valuation Yearbook and Ibbotson SBBI Classic Yearbook, the Ibbotson Cost of Capital Yearbook, the Ibbotson Beta Book, and various international and domestic reports. Prior to Morningstar, he was a product manager in the financial communications group at Ibbotson Associates. Before that, he was a bond and bond portfolio analyst, and also worked at the Chicago Board of Trade in the bond options pit for a filling group.