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About This Book
A one-stop shop for background and current thinking on the development and uses of rates of return on capital
Completely revised for this highly anticipated fifth edition, Cost of Capital contains expanded materials on estimating the basic building blocks of the cost of equity capital, the risk-free rate, and equity risk premium. There is also discussion of 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.
The book includes new case studies providing comprehensive 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.
- Addresses equity risk premium and the risk-free rate, including the impact of Federal Reserve actions
- Explores how to use Morningstar's Ibbotson and Duff Phelps Risk Premium Report data
- Discusses the global cost of capital estimation, including a new size study of European countries
Cost of Capital, Fifth Edition puts an emphasis on practical application. To that end, this updated 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.
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Table of contents
- Cover
- Title Page
- Copyright
- Dedication
- About the Authors
- Foreword
- Preface
- Acknowledgments
- Part One: Cost of Capital Basics
- Part Two: Estimating the Cost of Equity Capital
- Part Three: Estimating the Overall Cost of Capital
- Part Four: Estimating the Cost of CapitalâNon-Freely Traded Interests
- Part Five: Corporate Finance Officers: Using Cost of Capital Data
- Part Six: Other Cost of Capital Considerations
- Part Seven: Considerations in Special Applications
- Part Eight: Case Studies
- Part Nine: Advice to Practitioners
- About the Website
- Appendix I Bibliography
- Appendix II Data Resources
- Appendix III Glossary of Cost of Capital Terms
- Index of Cases
- Index
- End User License Agreement