Previous editions had subtitle: Estimation and applicati
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CONTENTS NOTE
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Cost of capital basics -- Defining cost of capital -- Introduction to cost of capital applications: valuation and project selection -- Net cash flow: the preferred measure of return -- Discounting versus capitalizing -- Relationship between risk and cost of capital -- Cost components of a company's capital structure -- Weighted average or overall cost of capital -- Appendix 7.1: Iterative process using CAPM to calculate the cost of equity component of the weighted average cost of capital: constant capital structure -- Appendix 7.2: Iterative process using CAPM to calculate the cost of equity component of the weighted average cost of capital: changing capital structure -- Estimating the cost of equity capital "as if publicly traded" -- Equity risk premium -- 8.1 Appendix -- Build-up models -- Capital asset pricing model (CAPM) -- Proper use of beta -- Criticisms of CAPM and beta versus other risk measures -- Size effect -- Criticisms of size effect -- 14.1 Appendix: D&P risk study -- Alternative models to the build-up and capm models -- FAMA-French, APT, market derived capital pricing model, yield-spread model -- DCF method -- Global cost of capital models -- Using Morningstar/Ibbotson Associates cost of capital data -- Corporate financial officers- using cost of capital data -- Capital budgeting and feasibility studies -- Cost of capital for divisions/reporting units -- Cost of capital in valuing acquisition/merger -- Cost of capital in transfer pricing -- Cost of capital in economic value added financial management system -- Cost of capital for closely-held entities -- Handling the discount for lack of marketability for operating businesses -- The private company discount -- Pass-through entities: partnerships lLCs and S Corps -- 27.1 Appendix -- Private investment companies -- Venture capital investments -- Other topics -- Minority versus control implications of the cost of capital data -- How cost of capital relates to excess earnings method -- Adjusting the discount rate to alternative economic income measures -- Equivalence with alternative cash flow methods for valuing companies -- Common errors in estimation and use of cost of capital -- Cost of capital in the courts -- Real estate and ad Valorem -- Cost of capital for real estate investments -- 36.1 Appendix: valuing real property -- REITs -- 37.1 Appendix: Cost of capital in Ad Valorem taxation -- Advice to practitioners -- Dealing with cost of capital issues: advice from the authors -- Cross examining experts on cost of capital -- Appendices -- Appendix A: bibliography -- Appendix B: data sources -- Appendix C: international glossary of business valuation terms -- Appendix D: Roger Grabowski's cost of capital section in Kohler report -- Appendix E: developing cost of capital (capitalization rates and discount rates) using valusource valuation software -