Cost of capital : applications and examples / Shannon P. Pratt, Roger J. Grabowski

Author:: Pratt, Shannon P.
Published:: Hoboken, N.J. : John Wiley & Sons, [2008]
Copyright Date:: ©2008
Edition:: 3rd ed.
Physical Description:: xxxviii, 778 pages : illustrations ; 26 cm
Additional Creators:: Grabowski, Roger J.

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Contents:

Cost of capital basics -- Defining cost of capital -- Introduction to cost of capital applications: valuation and project selection -- Net cash flow: preferred measure of economic income -- Discounting versus capitalizing -- Relationship between risk and cost of capital -- Cost components of a company's capital structure -- Estimating the cost of equity capital and the overall cost of capital -- Build-up method -- Capital asset pricing model -- Equity risk premium -- Beta: differing definitions and estimates -- Criticisms of CAPM and beta versus other risk measures -- Size effect -- Criticisms of the size effect -- Company-specific risk -- Alternative cost of equity capital models -- Implied cost of equity capital -- Weighed average cost of capital -- Global cost of capital models -- Using Morningstar cost of capital data -- Corporate financial officers- using cost of capital data -- Capital budgeting and feasibility studies -- Cost of capital for divisions and reporting units -- Cost of capital in evaluating acquisitions and mergers -- Cost of capital in transfer pricing -- Central role of cost of capital in economic value added -- Cost of capital for closely held entities -- Handling the discount for lack of marketability for operating businesses -- Private company discount -- Cost of capital of interest in pass-through entities -- Cost of capital in private investment companies -- Relationship between risk and returns in venture capital investments -- Other topics -- Minority versus control implications of the cost of capital data -- How cost of capital relates to excess earnings method of valuation -- Adjusting the discount rate to alternative economic income measures -- Estimating net cash flows -- Common errors in estimation and use of cost of capital -- Cost of capital in the courts -- Real estate and ad Valorem -- Cost of capital of real property-individual assets -- Cost of capital of real estate entities -- Cost of capital in ad valorem taxation -- Advice to practitioners -- Dealing with cost of capital issues -- Questions to ask business valuation experts -- Appendix A: bibliography -- Appendix B: data sources -- Appendix C: international glossary of business valuation terms -- Appendix D: Sample report submitted to U.S. tax court by Roger J. Grabowski -- Appendix E: ValuSource valuation software -- Index.

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ISBN:

9780470171158 (cloth : alk. paper)
0470171154 (cloth : alk. paper)

Bibliography Note:

Includes bibliographical references (pages 655-681) and index.

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