From valuing individual securities or capital projects to evaluating M&A, estimating cost of capital is one of the most important decisions that corporate finance professionals make. Duff & Phelps is the leading global independent valuation services firm and a trusted expert on estimating cost of capital. For over 20 years, our professionals have published books, created studies, provided recommendations and built tools to help businesses and valuation professionals estimate cost of capital.
Duff & Phelps regularly hosts events and provides insights on current topics impacting cost of capital assumptions and demos of new products. Our thought leaders aim to help clients when estimating cost of capital. Explore their expert analysis and opinions on latest trends.
2020 was a challenging year as COVID-19 uprooted the world economy and precipitated a global economic slowdown. Duff & Phelps, A Kroll Business, continued to provide clarity to businesses and professionals on cost of capital matters with our Cost of Capital Navigator platform. We also delivered frequent insights from our thought leaders in this defying environment.
We look back at some of our major cost of capital accomplishments in 2020 here.
U.S. Equity Risk Premium Recommendations
Duff & Phelps regularly reviews fluctuations in the global economic and financial market conditions. These reviews warrant a periodic reassessment of the equity risk premium (ERP) and the accompanying risk-free rate and key inputs used to calculate the cost of equity capital in the context of the Capital Asset Pricing Model (CAPM) and other models used to develop discount rates.
Cost of Capital in the Current Environment
COVID-19 has generated an unprecedented reaction in both financial markets and economies worldwide, and the resulting uncertainty highlights significant challenges in estimating the cost of capital inputs in the current environment. The infographic below tracks the impact of COVID-19 on some of the financial market and economic indicators used to support the Duff & Phelps recommended U.S. Equity Risk Premium and accompanying Normalized Risk-Free Rate.
Cost of Capital Navigator
The Duff & Phelps Cost of Capital Navigator is an online platform that guides you through the process of estimating the cost of capital, a key component of any valuation analysis. You can subscribe to any or all four cost of capital modules, each offering three annual subscription levels–Basic, Pro and Enterprise. Additional products offered by Duff & Phelps include the annual Stocks, Bonds, Bills and Inflation® (SBBI®) Yearbook which provides historical U.S. capital markets data.
U.S. Cost of Capital Module
U.S. Industry Benchmarking Module
International Cost of Capital Module
International Industry Benchmarking Module
Stocks, Bonds, Bills, and Inflation (SBBI®) Yearbook
COVID-19 One Year Later – Impact on Cost of Capital and Related Valuation Issues
International Cost of Capital – Understanding and Quantifying Country Risk
Coronavirus – Cost of Capital Considerations in the Current Environment
Introducing Cost of Capital Navigator - International Cost of Capital Module
International Cost of Capital – Quantifying Country Risk Premia
Introducing Cost of Capital Navigator – U.S. Industry Benchmarking Module
Cost of Capital Key Achievements in 2020
Duff & Phelps 2021 SBBI® Yearbook
Duff & Phelps Recommended U.S. Equity Risk Premium Decreased from 6.0% to 5.5%, Effective December 9, 2020
Click here to track economic and financial indicators in the latest Cost of Capital infographic
Valuation Insights – Second Quarter 2020
Carla Nunes Participated in International Institute of Business Valuers Webinar
James Harrington and Carla Nunes Published in CBV Institute’s Journal of Business Valuation Annual Publication
Objective valuations for financial reporting, tax and management planning purposes.
Business Valuation Services
Valuation of a business or a business interest.
Middle-market M&A advisory differentiated by industry expertise and superior deal execution.
Alternative Asset Advisory
Provides an array of consulting services to alternative investment managers and investors.