Cost of Capital in Litigation addresses cost of capital issues in litigation and discusses major decisions, highlighting how to avoid errors that have often been made by experts. The book helps the attorney and valuation expert understand the decisions within the context of the theory of cost of capital and includes a chapter on cross-examining experts on cost of capital issues. Throughout, there are citation to relevant material and cross-reference to Cost of Capital: Applications and Examples, Fourth Edition.
In this long-awaited Third Edition of Cost of Capital: Applications and Examples, renowned valuation experts and authors Shannon Pratt and Roger Grabowski address the most controversial issues and problems in estimating the cost of capital. This authoritative book makes a timely and significant contribution to the business valuation body of knowledge and is an essential part of the expert's library.
Proven, practical techniques for estimating the cost of capital "I would recommend Cost of Capital and the companion Cost of Capital Workbook as excellent tools for passing the various professional exams that lead to valuation accreditations and designations." -James R. Hitchner, Phillips Hitchner Group, Inc., Atlanta, Georgia "As a discussion leader for the AICPA ABV exam review course, this set of questions is perfect for people to use for practice for that exam and others (ASA and NACVA from my experience), for that matter. The mix of formats, including exercises, is great." -Ronald L. Seigneur, Seigneur & Company, PC, CPAs, Lakewood, Colorado "The exercises are particularly good." -Stephen J. Bravo, Apogee Business Valuations, Framingham, Massachusetts Cost of capital estimation has long been recognized as one of the most critical elements in business valuation, capital budgeting, feasibility studies, and corporate finance decisions-it is also, however, one of the most difficult procedures to perform and assess. The Cost of Capital Workbook will help financial officers of small, midsize, and even multibillion dollar companies estimate required rates of return and tackle the myriad issues associated with cost of capital. It will also help business valuation professionals of all levels to gain a greater understanding of cost of capital concepts and procedures. Using hands-on exercises designed to implement procedures described in Cost of Capital, Second Edition, the Cost of Capital Workbook provides a deeper understanding of cost of capital problems by offering a practical experience in applying solutions. The Workbook includes multiple choice, true or false, and fill-in-the-blank questions as well as: * Exercises estimating cost of capital by the build-up model and the Capital Asset Pricing Model * Exercises using Ibbotson Associates' Stocks, Bonds, Bills, and Inflation Valuation Edition Yearbook * Applications using discounted cash flow (DCF) methods, based on forecasted earnings and cash flows * Examples covering valuing a business by both equity and invested capital procedures, making project selections, and utility-rate determinations * Numerous exercises using Ibbotson data from the Cost of Capital Workbook Business appraisers, corporate finance officers, CPAs, and attorneys will find the Cost of Capital Workbook an indispensable guide to the effective estimation and application of cost of capital.
An authoritative text on cost of capital for both the nonprofessional and the valuation expert -- now revised and expanded In endeavoring to practice sound corporate finance, there is perhaps nothing so critical, nor slippery, as cost of capital estimation. The second edition of Cost of Capital: Estimation and Applications combines a state-of-the-art treatise on cost of capital estimation with an accessible introduction for the nonprofessional. This comprehensive yet usable guide begins with an exposition of basic concepts understandable to the lay person and proceeds gradually from simple applications to the more complex procedures commonly found in the marketplace. New features of the revised and expanded Second Edition include chapters on Economic Value Added (EVA) and reconciling cost of capital in the income approach with valuation multiples in the market approach, as well as expanded coverage of cost of capital in the courts and handling discounts for marketability. Cost of Capital remains an incomparable resource for all parties interested in effective business valuation.
"This book is required reading for anyone involved in the practical issues of cost of capital decisions. It is written in a way that engages the novice, and yet challenges the professional to rethink the real issues." Brendan Scholey, Bloomberg. The cost of capital is the fundamental financial tool for business decision-making. It drives measures of value creation and destruction, and forms the basis of financial analysis using cash flow and other frameworks. This book is here to help the business world to use the cost of capital for real. The Real Cost of Capital describes the key issues in understanding and using the cost of capital today, taking principles from the world of managerial finance and putting them into the context of major investment decisions. Should, for example, a company use its own cost of capital to appraise new investments and acquisitions? What cost of capital might a US company use when appraising an investment in, say, the Philippines? For a typical investment, which type of risk is more important – specific risk or systematic risk? How should these risks be reflected in, say, a venture capital situation? Debt is cheaper than equity – so why don’t companies raise more debt than they do? Most practitioners use the weighted average cost of capital ("WACC") in valuation and appraisal – but when should an alternative approach be used? This book will help you find the answers. The Real Cost of Capital is required reading for anyone involved in the practical issues of cost of capital decisions. It brings together the latest academic thinking with practical requirements in a real-life context, and the authors have used their combined experience of advising governments and international blue-chip companies to bring readers up to date with current issues. The Real Cost of Capital includes chapters on choosing models, calculating the cost of capital using real-life data sources, and calculating the cost of capital in an international context (a subject not usually covered in academic texts). It also has chapters and worked examples on the practical application of the cost of capital in business valuations, high-tech situations and the wide range of premia and discounts that can be applied to the cost of capital. The book has an associated website www.costofcapital.net which contains some current links. The site also gives access to tax rate information and financial data relevant to using cost of capital around the world. The objective is to make sure that the corporate planner, student, adviser or decision maker, when she/he is on the road, can simply open the book or dial in and take advantage of a wealth of decision-making support, without the pain of extended academic study.
Score your highest in corporate finance The math, formulas, and problems associated with corporate finance can be daunting to the uninitiated. Corporate Finance For Dummies introduces you to the practices of determining an operating budget, calculating future cash flow, and scenario analysis in a friendly, un-intimidating way that makes comprehension easy. Corporate Finance For Dummies covers everything you'll encounter in a course on corporate finance, including accounting statements, cash flow, raising and managing capital, choosing investments; managing risk; determining dividends; mergers and acquisitions; and valuation. Serves as an excellent resource to supplement coursework related to corporate finance Gives you the tools and advice you need to understand corporate finance principles and strategies Provides information on the risks and rewards associated with corporate finance and lending With easy-to-understand explanations and examples, Corporate Finance For Dummies is a helpful study guide to accompany your coursework, explaining the tough stuff in a way you can understand.
Working Capital Management provides a general framework that will help managers understand working capital using a comprehensive approach that links operating decisions to their financial implications and to the overall business strategy. It will also help managers to gain a better understanding of the key drivers to profitability and value creation.
An accessible guide to the essential issues of corporate finance While you can find numerous books focused on the topic of corporate finance, few offer the type of information managers need to help them make important decisions day in and day out. Value explores the core of corporate finance without getting bogged down in numbers and is intended to give managers an accessible guide to both the foundations and applications of corporate finance. Filled with in-depth insights from experts at McKinsey & Company, this reliable resource takes a much more qualitative approach to what the authors consider a lost art. Discusses the four foundational principles of corporate finance Effectively applies the theory of value creation to our economy Examines ways to maintain and grow value through mergers, acquisitions, and portfolio management Addresses how to ensure your company has the right governance, performance measurement, and internal discussions to encourage value-creating decisions A perfect companion to the Fifth Edition of Valuation, this book will put the various issues associated with corporate finance in perspective.
Praise for Fourth Edition of Cost of Capital Workbook and Technical Supplement "Pratt and Grabowski went the extra mile to supplement their magnum opus by providing this Workbook and Technical Supplement. As a finance professor for many years, I know from experience that students and teachers really value supplements to textbooks. It allows the teacher to help the student to review and apply what was presented in the text, and the PowerPoints are a great service to teachers in course preparation. The website provides various worksheets that show the inner workings of the models. I enthusiastically recommend the Workbook and Technical Supplement to finance professors and teachers and their students. —Daniel L. McConaughy, PhD, ASA, Professor of Finance, California State University, Northridge, Valuation Services, Crowe Horwath LLP "The Workbook and Technical Supplement provides a detailed tutorial on understanding and executing the theoretical concepts explained in the Fourth Edition. This supplement is three books in one. Part One is a step-by-step tutorial on estimating certain key components of the cost of equity capital. Part Two provides a bridge between the theory and some practical applications, such as estimating the cost of capital for real property. Parts Three and Four allow the readers to test their comprehension of the concepts and identify areas for a review. It is almost as good as having Professors Pratt and Grabowski looking over your shoulder to ensure that one is both comprehending and correctly implementing the complex concepts.." —Ashok Abbott, PhD, Associate Professor of Finance, College of Business & Economics, West Virginia University "This text provides the most comprehensive coverage of cost of capital issues that I have seen to date. Messrs. Pratt and Grabowski have created a very accessible and lucid treatment of what most would consider an opaque subject. The Fourth Edition is especially important for its new topics as well as expanded coverage of concepts from earlier editions. Of particular interest is the review of the extreme market conditions during the 2008–2009 crisis and the effect that the unprecedented volatility had on traditional cost of capital models. For years, Pratt and Grabowski's research has informed the business valuation curriculum of the American Society of Appraisers. This book will be added to our reading list, and thousands of students worldwide will benefit from the state?of?the?art content of the Fourth Edition and the companion Workbook and Technical Supplement. Furthermore, Cost of Capital, Fourth Edition should be a mandatory part of every valuation practitioner's library. If you buy this book, you can expect it to become well worn and remain on your desk within arm's length until the publication of the Fifth Edition." —John Barton, ASA, CPA, Chairman, Business Valuation Committee, ASA "Cost of capital is so much more complex than it used to be. With so many additional considerations regarding each variable of the cost of capital formula, this book is a must for anyone that needs to understand or develop a discount rate. Even the most experienced practitioner will benefit from the outstanding work of Pratt and Grabowski. This book has to become part of your library." —Gary R. Trugman, CPA/ABV, MCBA, ASA, MVS, President, Trugman Valuation Associates, Inc.
