BV550 Mastering the Cost of Capital Professional: Models, Inputs, and Case Study

Class Date/Time

Tuesday, April 29, 2025
1:00pm-2:30pm Eastern Standard Time

Registration Includes

• Access to virtual webinar via zoom will be accessible via education dashboard (login required)
• Electronic webinar handout(s)*

*Any webinar handouts will be made available to registrants the morning of the live event and made accessible via your education dashboard (login required). Once handouts have been posted for download, the class is no longer refundable. 

Continuing Education (CE) Credit

This webinar will award 1.8 CE/CPE hour(s) for the live event. 

If you are a designated member of ASA, CE credit will automatically be entered into your record after you participate in the live webinar and complete any required post-webinar components within the Course Wrap-up section.  

NASBA and Continuing Professional Education (CPE) Credit

Policies: ASA's Refund and Cancellation Policy and ASA's Complaint Resolution Policy. ASA is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have the final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website www.learningmarket.org

CPE Credit: Up to (1.8) CPE credits
Program Level: Fundamental
NASBA Knowledge Type: Specialized Knowledge
Delivery Method: Virtual
Prerequisites: None
Advanced Preparation: None 

Webinar Description

This webinar will demonstrate how to estimate the Cost of Capital using the Cost of Capital Professional Platform. We will discuss the differences between various Cost of Equity models and their respective inputs. A case study will guide attendees through six different scenarios to determine the Cost of Equity for a hypothetical subject company. Additionally, we will provide a comparison of the results from all six scenarios to highlight the variations in the outcomes.

Instructional Methods

Methods include lecture, visual PPT presentation and polling questions. 

Course Audience

Business Appraisers

Learning Level 

Fundamental

• Introducing the Cost of Capital Professional platform
• Introducing the available Models in the platform: - Modified CAPM - Build Up model - Weighted Average Cost of Capital  
• Introducing the sources of inputs for the models and their calculations: - Risk Free Rate:  
  • 10-year Spot, 20-Year Spot, Custom input - Equity Risk Premium Sources:  
  • Center for Research in Security Prices (CRSP), Dr. Aswath Damodaran data library - Size Premium: 
  • Center for Research in Security Prices (CRSP) (Address difference between S&P 500 calculation and beta adjusted calculation).  - Geometric VS Arithmetic Mean - Industry Risk Premium and CAPM Betas: 
  • Dr. Aswath Damodaran data library (Levered and Unlevered betas)  
  • Salvidio & Partners publications (Levered and Unlevered betas) Case Study and Platform Walkthrough 
• Company Case Study 
  • Subject Company Name – Software Company LLC. o Valuation Date – 04/06/2020 
  • SIC Code – 7372  
  • Sales - $10 Million  
  • EBITDA - $2 Million   
  • Debt- $500 Thousand  
  • Debt to Equity ratio of 0.2  
  • Effective tax rate 15%  
  • Market Cap – Unknown  
• Applying Market Multiples to Determine estimate for Market Cap  
  • By looking at comparable companies in the market, we use a multiple to estimate the equity value of the target company. 
• Applying Build-Up model and Weighted Average Cost of Capital model (base case) 
• Applying Modified CAPM model and Weighted Average Cost of Capital model (base case) 
• Show Summary of all models and different scenario choices  
  • Scenario 1: Build Up Model, 20-year spot risk free rate, 20-year CRSP ERP, 10th Decile 
  • Scenario 2: Modified CAPM model, 20-year spot risk free rate, 20-year CRSP ERP, 10th Decile 
  • Scenario 3: Build Up Model, Normalized Risk-free rate 20-year spot risk free rate, 20-year CRSP ERP, 10th Decile 
  • Scenario 4: Modified CAPM model, Normalized Risk-free rate 20-year spot risk free rate, 20-year CRSP ERP, 10th Decile 
  • Scenario 5: Build Up model, Time period After the Great Depression, Normalized Risk-free rate 20-year spot risk free rate, 20-year CRSP ERP, 10th Decile 
  • Scenario 6: Modified CAPM model, Time period After the Great Depression, Normalized Risk-free rate 20-year spot risk free rate, 20-year CRSP ERP, 10th Decile

Upon completion of this course, students will be able to:

• Discuss the available models in the Cost of Capital Professional platform, including the Modified CAPM, Build-Up model, and Weighted Average Cost of Capital;
• Explain the inputs for the models, such as the risk-free rate, equity risk premium, and size premium, using credible sources like CRSP and Dr. Aswath Damodaran’s data library;
• Apply the Cost of Capital models to a case study; and
• Summarize the outcomes of different scenarios using the platform to compare results across various model and assumptions.

eMaterials

All course materials included with you registration are PDF Download Only items made available to students prior to the start of the class and are not for resale or distribution. All downloadable materials are accessible via your education dashboard (login required). Once eMaterials have been posted for download, the class is no longer refundable.

Accessing eMaterials

eMaterials are provided electronically in PDF format and posted to the class the morning of the live event and listed within the education dashboard for all registrants to securely access prior to the start of the webinar. When opting to print downloadable materials, it is recommended that settings be adjusted to print in black and white (or grayscale) and consider printing double-sided on recycled paper.

Certificate of Completion

A certificate of completion will be available to view and/or download immediately via your education dashboard once all required components are completed.