BV555 Cost of Capital Navigator Case Study – A Deep Dive into the Theory vs. Practice Using the Latest Datasets

Webinar Description

The Cost of Capital Navigator has been revamped to make it easier to access data, while providing new data sets that can be used together to improve cost of capital estimates. However, many valuation professionals are unaware on how those data sets can be used to estimate, benchmark or augment their cost of capital estimates in a cohesive manner. This session will help valuation professionals understand which cost of capital datasets are available in the U.S. Cost of Capital module of the Cost of Capital Navigator. We will walk through a case study on how these data sets can be used together. In addition, we walk through the study, we will provide the theory and methodologies behind certain inputs, which will help you support your own selections. This includes, a review of risk-free rates, equity risk premia, betas, industry risk premia, size premia, cost of debt, and capital structure.

Learning Outcomes

Upon webinar completion, the participant will be able to:

• Identify where U.S. risk-free rate, equity risk premium, and size premium inputs are located and can be downloaded in the Cost of Capital Navigator;
• Describe the methods that can be used to estimate equity risk premium - Calculate industry risk premium by selecting different types of CAPM betas;  
• Differentiate between the Kroll CRSP Deciles Size Study and the Kroll Risk Premium Report when arriving at a size risk adjustment; 
• Identify the circumstances where the use of Deciles 10y and 10z may be appropriate when selecting a size premium;  
• Select a capital structure that is internally consistent with your standard of value and valuation purpose; and 
• Estimate the cost of equity for a distressed company.

Course Audience

In addition to traditional valuation professionals, this session will be valuable to corporate finance officers, CPAs who deal with either valuation for financial reporting, tax, litigation purposes or client valuations issues, and judges and attorneys who deal with valuation issues.

Instructor Information

Carla S. Nunes | Kroll

Carla S. Nunes, CFA, ABV, is a Managing Director in the Office of Professional Practice of Kroll. In addition, Carla is the Global Leader of Kroll’s Valuation Digital Solutions group, which produces cost of capital thought leadership content and data housed in the Cost of Capital Navigator. She has over 25 years of experience in valuation, financial reporting and tax, conducting numerous business and asset valuations for a variety of purposes including purchase price allocations, goodwill and asset impairments, mergers & acquisitions, tax restructuring, debt analysis, and gift and estate tax planning. Carla also has extensive experience working with multinational companies, having addressed complex tax, international cost of capital, and foreign exchange issues. Carla is a contributing author to “Cost of Capital: Applications and Examples,” 5th edition, by Shannon Pratt and Roger Grabowski. She is a co-author of the “Valuation Handbook” series and co-creator of the Kroll Cost of Capital Navigator. She recently co-authored Kroll’s ESG and Global Investor Returns Study and was a contributing author to The Appraisal Foundation’s “The Art of Valuation. Carla is a member of the Education Committee at the iiBV, and just completed her two-year term as Practitioner Director in the Board of FMA International.

Kevin Madden | Kroll

Kevin Madden is a director in the Valuation Digital Solutions group of the Valuation Advisory Services practice, based in the Chicago office. Kevin has more than 10 years of experience in financial services, specializing in project and product management and financial analysis. He is a lead contributor to the content and data housed in the Cost of Capital Navigator platform.

Kevin Latz | Kroll

Kevin Latz is a Senior Associate, based in Chicago, in the Kroll Digital Solutions group,. Kevin assists with data production, product management, and technical support related to the Cost of Capital Navigator platform. Kevin also assists with internal and external resources in support of Kroll’s cost of capital recommendations.

Continuing Education

Review of this session recording will award 2.4 CE hour(s). 

CPE credit is not awarded for this pre-recorded offering.