New from Duff & Phelps
New from Duff & Phelps:
2014 Valuation Handbook‚ÄĒGuide to Cost of Capital
Plus:¬†Cost of Capital Analyzer¬†by ValuSource
Both Available through NACVA and ValuSource
Salt Lake City, UT‚ÄĒFebruary 19, 2014
Duff & Phelps¬†has announced it will provide the data previously published in Morningstar’s¬†Ibbotson¬ģ¬†SBBI¬ģ¬†Valuation Yearbook¬†in its new publication, the¬†2014 Valuation Handbook‚ÄĒGuide to Cost of Capital, which will include all of the critical year-end data previously available in the¬†SBBI Valuation Yearbook.¬†The new¬†Valuation Handbook¬†will be timed to provide users of¬†SBBI¬†valuation data with a source of data to complete year-end valuations without interruption. To assist the valuation profession to learn about this new resource NACVA and ValuSource are offering a free webinar entitled “New Cost of Capital Data Sources” that will be presented by Roger Grabowski, managing director at Duff & Phelps and co-author of the upcoming¬†2014 Valuation Handbook-Guide to Cost of Capital. This free webinar will be held on¬†Monday, February 24¬†and¬†Monday, March 17¬†where Grabowski will discuss data sources and application of the book for business valuation and other financial analysis.
The new¬†Valuation Handbook¬†will include¬†two¬†sets of valuation data:
- Data previously available in the¬†SBBI Valuation Yearbook; and
- Data available in Duff & Phelps’¬†Risk Premium Report.
The¬†Risk Premium Report¬†has been published annually since 1996 and, like the former¬†SBBI Yearbook, provides data and methodology to assist financial professionals in estimating the cost of equity capital for a subject company using the capital asset pricing model (CAPM) and various build-up models. While the¬†Risk Premium Report¬†will no longer be published as a stand-alone publication, all of its data will be included in the new¬†Valuation Handbook.
New¬†Cost of Capital Analyzer
ValuSource, NACVA‚Äôs valuation software and database affiliate, is developing a web-based¬†Cost of Capital Analyzer¬†which will include 10 years of¬†Risk Premium Report data. The¬†Analyzer¬†will export cost of equity reports to Excel as well as download these reports to ValuSource‚Äôs valuation software (BVM¬†Pro, ValuSource Pro, and Express Business Valuation). The¬†Valuation Handbook¬†data previously available in the¬†SBBI Valuation Yearbook¬†will also be available to be downloaded into the valuation software.
Valuation Handbook¬†pricing available through NACVA and ValuSource
|2014 Valuation Handbook||
|Cost of Capital Analyzer (web-based)||
|Data previously available in the¬†SBBI Valuation Yearbook (web-based)||
|Bundle (All three items above)||
|For product announcements, and to pre-order¬†||click here|
Summary of ‚ÄėSBBI‚Äô Data Available in the New¬†2014 Valuation Handbook
The new¬†Valuation Handbook¬†will include all of the ‚Äúkey variables in estimating the cost of capital‚ÄĚ previously published in the user-friendly¬†SBBI Yearbook‚Äôs¬†‚Äúback page,‚ÄĚ including:
- Long-term (20-year) U.S. Treasury Coupon Bond Yield
Equity Risk Premium
- Long-horizon expected ‚Äúhistorical‚ÄĚ equity risk premium
- Long-horizon expected ‚Äúsupply side‚ÄĚ equity risk premium
- CRSP Mid-Cap, Low-Cap, and Micro-Cap size premia
- CRSP Deciles 1 through 10 size premia
- Size premia for the breakdown of CRSP Decile 10 into 10a (and its subdeciles 10w and 10x) and 10b (and its subdeciles 10y and 10z)
Industry Risk Premium
- Industry risk premia (IRPs) previously found in Table 3-5 in the¬†SBBI Valuation Yearbook
Same Data Sources
The¬†same¬†data sources used to produce the data in the former¬†SBBI Valuation Yearbook¬†will be used to produce the new¬†Valuation Handbook:
- The Center for Research in Security Prices (CRSP) market-cap-based NYSE/AMEX/NASDAQ indices;
- Standard & Poor‚Äôs¬†Research Insight¬†database; and
- SBBI Series from Morningstar‚Äôs¬†EnCorr¬†database.
Grabowski to Keynote NACVA and the CTI’s 2014 Annual Consultants’ Conference
Roger Grabowski and Shannon Pratt will kick off NACVA and the CTI’s¬†2014 Annual Consultants’ Conference¬†on the morning of Wednesday, June 18, 2014 in Las Vegas, NV, co-presenting¬†‚ÄúCost of Capital Update.‚ÄĚ¬†Drawing from the upcoming¬†Cost of Capital: Applications and Examples,¬†5th¬†ed., which they co-author, the session “will inform conference attendees of recent research on the risk-free rate, equity risk premium, size premium, company-specific risk premium, and methods for directly estimating the cost of capital for closely held businesses,‚ÄĚ¬†states Grabowski.¬†‚ÄúAfter attending the session, conference attendees will be able to list the current research on, and criticisms of, commonly applied methods of estimating the cost of capital and have a clearer understanding of the divergent positions when estimating the cost of capital,‚ÄĚ¬†states Pratt.
Other Morningstar/Ibbotson Valuation Data That Are Being Discontinued
Morningstar announced in late September 2013 that it will no longer publish the Ibbotson SBBI Valuation Yearbook and other valuation publications and products. The SBBI Valuation Yearbook and other ‚ÄúIbbotson‚ÄĚ valuation products have been widely used and cited in valuation reports for nearly 15 years and are generally considered one of the essential tools needed in every practitioner‚Äôs toolbox. Last year‚Äôs 2013 SBBI Valuation Yearbook (with data through Dec. 31, 2012) is Morningstar‚Äôs last SBBI Valuation Yearbook‚ÄĒMorningstar will not be publishing a 2014 version (with data through Dec. 31, 2013).
While¬†Ibbotson¬†SBBI Valuation Yearbook¬†may be the most familiar product to many practitioners, Morningstar is discontinuing other resources often used by practitioners as well: (i) hardcover books and downloadable PDF reports; and (ii) the Cost of Capital Resources website at¬†CCRC.Morningstar.com(Note: the CCRC website was ‚Äúswitched off‚ÄĚ on Dec. 31, 2013).
Morningstar will continue to publish the¬†SBBI Classic Yearbook,¬†which provides an analysis of the relative¬†performance¬†of various asset classes in the U.S., but does¬†not¬†provide extensive valuation data or methodology.
About the NACVA
The National Association of Certified Valuators and Analysts (NACVA) is a global, professional association that delivers training from the nation‚Äôs leading experts in consulting fields such as business valuation, financial litigation forensics, expert witnessing, forensic accounting, fraud risk management, mergers and acquisitions, business and intellectual property damages, fair value, healthcare consulting, and exit strategies. Along with its training and certification programs, NACVA offers a range of support services, reference materials, software, and customized databases to enhance the professional capabilities and capacities of its members. NACVA is a member of the Institute for Credentialing Excellence‚ĄĘ¬†(ICE‚ĄĘ). NACVA’s Certified Valuation Analyst¬ģ¬†(CVA¬ģ) designation is the¬†only¬†valuation credential accredited by the National Commission for Certifying Agencies¬ģ¬†(NCCA¬ģ), the accreditation body of the Institute for Credentialing Excellence. Other professional certifications offered by NACVA include the Master Analyst in Financial Forensics‚ĄĘ¬†(MAFF‚ĄĘ) and the Accredited in Business Appraisal Review‚ĄĘ (ABAR‚ĄĘ).
ValuSource automates the time-consuming and complex process of business valuation. With 80 percent of the market for business applications, data, and report writers, ValuSource provides critical software tools utilized by thousands of CPAs, investment banks, financial professionals, and countless business owners and stakeholders. ValuSource is also the leading provider of medical practice benchmarking software. The value of its products is not limited to the U.S., however. Around the world, a growing number of financial professionals and valuation experts seek out ValuSource’s software to value companies and structure deals. Because of the increased interest in business valuations based upon international accounting standards, ValuSource has developed international versions to meet demand.
About Duff & Phelps
As a leading global financial advisory and investment banking firm, Duff & Phelps leverages analytical skills, market expertise and independence to help clients make sound decisions. The firm advises clients in the areas of valuation, M&A and transactions, restructuring, alternative assets, disputes and taxation ‚Äď with more than 1,000 employees serving clients from offices in North America, Europe and Asia. For more information, visitwww.duffandphelps.com.¬†Investment banking services in the United States are provided by Duff & Phelps Securities, LLC. Member FINRA/SIPC. Transaction opinions are provided by Duff & Phelps, LLC. M&A advisory and capital raising services in the United Kingdom and Germany are provided by Duff & Phelps Securities Ltd., which is authorized and regulated by the Financial Conduct Authority.