{"product_id":"cost-of-capital-website-isbn-9781118555804","title":"Cost of Capital, + Website","description":"\u003cb\u003eA one-stop shop for background and current thinking on the development and uses of rates of return on capital\u003c\/b\u003e \u003cp\u003eCompletely revised for this highly anticipated fifth edition, \u003ci\u003eCost of Capital\u003c\/i\u003e 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.\u003c\/p\u003e \u003cp\u003eThe 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.\u003c\/p\u003e \u003cul\u003e \u003cli\u003eAddresses equity risk premium and the risk-free rate, including the impact of Federal Reserve actions\u003c\/li\u003e \u003cli\u003eExplores how to use Morningstar's Ibbotson and Duff Phelps Risk Premium Report data\u003c\/li\u003e \u003cli\u003eDiscusses the global cost of capital estimation, including a new size study of European countries\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003e\u003ci\u003eCost of Capital, Fifth Edition\u003c\/i\u003e 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.\u003c\/p\u003e \u003cp\u003eAbout the Authors xiii\u003c\/p\u003e \u003cp\u003eForeword xxiii\u003c\/p\u003e \u003cp\u003ePreface xxv\u003c\/p\u003e \u003cp\u003eAcknowledgments xxix\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART ONE Cost of Capital Basics 1\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCHAPTER 1 Defining Cost of Capital 3\u003c\/p\u003e \u003cp\u003eCHAPTER 2 Introduction to Cost of Capital Applications: Valuation, Project Selection, and Ratemaking 11\u003c\/p\u003e \u003cp\u003eCHAPTER 3 Net Cash Flow: The Preferred Measure of Economic Income 17\u003c\/p\u003e \u003cp\u003eAPPENDIX 3A Alternative Measures of Economic Income 30\u003c\/p\u003e \u003cp\u003eCHAPTER 4 Discounting versus Capitalizing 36\u003c\/p\u003e \u003cp\u003eAPPENDIX 4A Equivalency of Capitalizing Residual Income 56\u003c\/p\u003e \u003cp\u003eCHAPTER 5 Discounting—Beyond the Basics 60\u003c\/p\u003e \u003cp\u003eCHAPTER 6 Relationship between Risk and the Cost of Capital 70\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART TWO Estimating the Cost of Equity Capital 89\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCHAPTER 7 Risk-free Rate 91\u003c\/p\u003e \u003cp\u003eCHAPTER 8 Equity Risk Premium 110\u003c\/p\u003e \u003cp\u003eAPPENDIX 8A Deriving ERP Estimates 141\u003c\/p\u003e \u003cp\u003eAPPENDIX 8B Other Sources of ERP Estimates 173\u003c\/p\u003e \u003cp\u003eCHAPTER 9 Build-up Method 177\u003c\/p\u003e \u003cp\u003eCHAPTER 10 Capital Asset Pricing Model 189\u003c\/p\u003e \u003cp\u003eCHAPTER 11 Beta: Differing Definitions and Estimates 202\u003c\/p\u003e \u003cp\u003eAPPENDIX 11A Examples of Computing OLS Beta, Sum Beta, and Full-information Beta Estimates 225\u003c\/p\u003e \u003cp\u003eAPPENDIX 11B Estimating Beta: Interpreting Regression Statistics 234\u003c\/p\u003e \u003cp\u003eCHAPTER 12 Unlevering and Levering Equity Betas 243\u003c\/p\u003e \u003cp\u003eCHAPTER 13 Criticism of CAPM and Beta versus Other Risk Measures 269\u003c\/p\u003e \u003cp\u003eAPPENDIX 13A Example of Computing Downside Beta Estimates 298\u003c\/p\u003e \u003cp\u003eCHAPTER 14 Size Effect 301\u003c\/p\u003e \u003cp\u003eCHAPTER 15 Criticisms of the Size Effect 331\u003c\/p\u003e \u003cp\u003eAPPENDIX 15A Other Data Issues Regarding the Size Effect 363\u003c\/p\u003e \u003cp\u003eCHAPTER 16 Company-specific Risk 372\u003c\/p\u003e \u003cp\u003eCHAPTER 17 Distressed Businesses 400\u003c\/p\u003e \u003cp\u003eAPPENDIX 17A Cost of Capital and the Valuation of Worthless Stock 428\u003c\/p\u003e \u003cp\u003eCHAPTER 18 Other Methods of Estimating the Cost of Equity Capital 444\u003c\/p\u003e \u003cp\u003eCHAPTER 19 Using the Duff \u0026amp; Phelps Risk Premium Report Data 471\u003c\/p\u003e \u003cp\u003eAPPENDIX 19A Examples Using the Duff \u0026amp; Phelps Risk Premium Report Data 499\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART THREE Estimating the Overall Cost of Capital 519\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCHAPTER 20 Other Components of a Business's Capital Structure 521\u003c\/p\u003e \u003cp\u003eCHAPTER 21 Weighted Average Cost of Capital 544\u003c\/p\u003e \u003cp\u003eAPPENDIX 21A Iterative Process Using CAPM to Calculate the Cost of Equity Component of the Weighted Average Cost of Capital 576\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART FOUR Estimating the Cost of Capital—Non-Freely Traded Interests 609\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCHAPTER 22 Handling Discounts for Lack of Marketability and Liquidity for Minority Interests in Operating Businesses 611\u003c\/p\u003e \u003cp\u003eCHAPTER 23 Cost of Capital of Family Holding Company Interests 630\u003c\/p\u003e \u003cp\u003eCHAPTER 24 The Private Company Discount for Operating Businesses 650\u003c\/p\u003e \u003cp\u003eCHAPTER 25 Cost of Capital of Interests in Pass-through Entities 663\u003c\/p\u003e \u003cp\u003eCHAPTER 26 Relationship between Risk and Returns in Venture Capital and Private Equity Investments 680\u003c\/p\u003e \u003cp\u003eCHAPTER 27 Cost of Capital for Closely Held Businesses 693\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART FIVE Corporate Finance Officers: Using Cost of Capital Data 711\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCHAPTER 28 Capital Budgeting and Feasibility Studies 713\u003c\/p\u003e \u003cp\u003eCHAPTER 29 Cost of Capital for Divisions and Reporting Units 722\u003c\/p\u003e \u003cp\u003eCHAPTER 30 Cost of Capital for Fair Value Reporting of Intangible Assets 757\u003c\/p\u003e \u003cp\u003eCHAPTER 31 Cost of Capital in Evaluating Mergers and Acquisitions 779\u003c\/p\u003e \u003cp\u003eCHAPTER 32 Cost of Capital in Transfer Pricing 793\u003c\/p\u003e \u003cp\u003eAPPENDIX 32A Cost of Capital in Transfer Pricing Example 822\u003c\/p\u003e \u003cp\u003eCHAPTER 33 The Role of the Cost of Capital in EVA and in Corporate Value-Based Management 825\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART SIX Other Cost of Capital Considerations 839\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCHAPTER 34 Estimating Economic Income 841\u003c\/p\u003e \u003cp\u003eCHAPTER 35 Minority versus Control Implications of Cost of Capital Data 861\u003c\/p\u003e \u003cp\u003eCHAPTER 36 How Cost of Capital Relates to the Excess Earnings Method of Valuation 873\u003c\/p\u003e \u003cp\u003eCHAPTER 37 Adjusting the Discount Rate to Alternative Economic Income Measures 881\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART SEVEN Considerations in Special Applications 897\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCHAPTER 38 How Courts View Cost of Capital 899\u003c\/p\u003e \u003cp\u003eCHAPTER 39 Global Cost of Capital Models 1011\u003c\/p\u003e \u003cp\u003eCHAPTER 40 Cost of Capital of Real Property—Individual Assets 1052\u003c\/p\u003e \u003cp\u003eAPPENDIX 40A Valuing Real Property 1076\u003c\/p\u003e \u003cp\u003eCHAPTER 41 Cost of Capital of Real Estate Entities 1084\u003c\/p\u003e \u003cp\u003eAPPENDIX 41A Valuing Real Estate Entities 1122\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART EIGHT Case Studies 1129\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCHAPTER 42 Cost of Capital for a Mid-Sized Company 1131\u003c\/p\u003e \u003cp\u003eAPPENDIX 42A Report for Cost of Capital for a Mid-Sized Company 1138\u003c\/p\u003e \u003cp\u003eCHAPTER 43 Cost of Capital for a Smaller-Sized Company 1162\u003c\/p\u003e \u003cp\u003eAPPENDIX 43A Report for Cost of Capital for a Smaller-Sized Company 1168\u003c\/p\u003e \u003cp\u003e\u003cb\u003ePART NINE Advice to Practitioners 1179\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003eCHAPTER 44 Common Errors in Estimation and Use of Cost of Capital 1181\u003c\/p\u003e \u003cp\u003eCHAPTER 45 Advice on Dealing with Cost of Capital Issues 1199\u003c\/p\u003e \u003cp\u003eAPPENDIX I Bibliography 1213\u003c\/p\u003e \u003cp\u003eAPPENDIX II Data Resources 1239\u003c\/p\u003e \u003cp\u003eAPPENDIX III Glossary of Cost of Capital Terms 1253\u003c\/p\u003e \u003cp\u003eAbout the Website 1266\u003c\/p\u003e \u003cp\u003eIndex of Cases 1267\u003c\/p\u003e \u003cp\u003eIndex 1271\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eShannon P. Pratt,\u003c\/b\u003e CFA, FASA, ARM, MCBA, CM\u0026amp;AA, referred to as the father of business valuations, is the author of several bestselling Wiley business valuation books and a sought-after speaker at business valuation industry conferences. He is the managing owner of Shannon Pratt Valuations, Inc., and has served as supervisory analyst for over 3,000 business valuation engagements in forty years and as an expert witness in numerous state and federal courts on contested business valuations. Dr. Pratt is co-author of the upcoming \u003ci\u003eLawyer's Guide to Cost of Capital\u003c\/i\u003e. \u003c\/p\u003e\u003cp\u003e\u003cb\u003eRoger J. Grabowski\u003c\/b\u003e is managing director of Duff \u0026amp; Phelps LLC. Roger 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. Grabowski authors the annual Duff \u0026amp; Phelps\u003ci\u003e Risk Premium Report\u003c\/i\u003e and is co-author of the upcoming \u003ci\u003e2014 Valuation Handbook:Guide to Cost of Capital\u003c\/i\u003e and co-author of the upcoming \u003ci\u003eLawyer's Guide to Cost of Capital\u003c\/i\u003e.   \u003c\/p\u003e\u003cp\u003e\u003cb\u003e\u003ci\u003eCost of Capital, Fifth Edition: Applications and Examples\u003c\/i\u003e\u003c\/b\u003e \u003c\/p\u003e\u003cp\u003e\u003ci\u003eCost of Capital\u003c\/i\u003e is published with updated authoritative text, applications, workbook examples and cases, a technical supplement, and website. Completely revised for this highly anticipated fifth edition, there are expanded materials on estimating the basic building blocks of the cost of equity capital, the risk-free rate, and equity risk premium. \u003c\/p\u003e\u003cp\u003eThere is an expanded discussion on 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. \u003c\/p\u003e\u003cp\u003e\u003ci\u003eCost of Capital\u003c\/i\u003e includes new case studies providing comprehe sive 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. \u003c\/p\u003e\u003cp\u003eTeeming with new quotes and citations to relevant material from the leading authorities on capital valuation, the new edition includes updated discussion of the following issues: \u003c\/p\u003e\u003cul\u003e \u003cb\u003e\u003cli\u003eEquity risk premium and the risk-free rate, including the impact of Federal Reserve actions\u003c\/li\u003e\u003c\/b\u003e \u003cb\u003e\u003cli\u003eHow to use Morningstar's Ibbotson and Duff \u0026amp; Phelps \u003ci\u003eRisk Premium Report\u003c\/i\u003e data Criticisms of CAPM and reasons why multiple procedures should be used in developing discount and capitalization rates\u003c\/li\u003e\u003c\/b\u003e \u003cb\u003e\u003cli\u003eGlobal cost of capital estimation, including a new size study of European countries\u003c\/li\u003e\u003c\/b\u003e \u003cb\u003e\u003cli\u003eAdjusting discount and capitalization rates for different measures of economic income, including pretax discount rates\u003c\/li\u003e\u003c\/b\u003e \u003c\/ul\u003e \u003cp\u003e\u003ci\u003eCost of Capital: Applications and Examples\u003c\/i\u003e puts an emphasis on practical application. To that end, this updated fifth 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.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47988997095653,"sku":"NP9781118555804","price":226.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781118555804.jpg?v=1761782365","url":"https:\/\/k12savings.com\/es\/products\/cost-of-capital-website-isbn-9781118555804","provider":"K12savings","version":"1.0","type":"link"}