The cost of capital is one the most important considerations in estimating value using the income approach. In this session, participants will learn the theory underlying the cost of capital, as well as practical applications using the Duff & Phelps Valuation Handbook CRSP and Risk Premium Report data.
- Alternative methods for estimating the discount and capitalization rates (Build Up, CAPM)
- Alternative sources of data (Duff & Phelps Valuation Handbook CRSP and Risk Premium Report data)
- Determination of the values for the risk free rate, equity risk premium, size premium, and specific company risk
- Estimation of the long term growth rate