Webinar Replay - Higher for Longer? Cost of Capital in the Current Environment
Sep 28, 2023

Cost of Capital Ramifications of the Russia-Ukraine War and Global Inflationary Pressures Podcast
Feb 13, 2023
by Carla Nunes, James P. Harrington

Kroll is the leading global independent valuation services provider 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.
Kroll 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.
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Discover how Kroll engaged with the client's Board to explain the concepts and nuances of cost of capital so that they could pursue new deals and unlock growth.
Kroll's Cost of Capital (Valuation Digital Solutions) and Valuation Services teams recently came together for a company seeking to improve its approach to estimate cost of capital used in cross-border M&A pricing. Through our combined expertise, the client was able to get sound data and insights for quantifying risk globally and is now pursuing new deals to further strengthen its growth strategy.
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 Kroll’s Global Cost of Capital Inputs: Recommended Equity Risk Premium and accompanying Normalized Risk-Free Rate.
Kroll examined the relationship between historical returns of over 13,000 publicly traded companies across a variety of geographies and industries and their ESG ratings to determine the correlation of ESG ratings to company performance.
Provides size premia, risk premia, equity risk premia, risk-free rates, betas and industry risk premia that can be used to estimate U.S. cost of capital.
Subscribe nowProvides U.S. industry-level inputs needed to estimate cost of capital and industry-level benchmarks that can be used to augment and support custom analyses.
Subscribe nowProvides country risk premia, relative volatility factors, equity risk premia and international industry betas that can be used to estimate cost of capital globally.
Subscribe nowProvides global industry-level inputs needed to estimate cost of capital and global industry-level benchmarks that can be used to augment and support custom analyses.
Subscribe nowCompany-Level Beta Module provides a simple tool and dataset that enables users to calculate levered, unlevered and relevered company-level betas.
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