Any business valuer using the income approach will be heartened to hear that most of the main cost of capital data providers are producing similar cost of equity estimates as 2023 begins. In a head-to-head test, Kroll’s Navigator, BVR’s Cost of Capital Professional, and the Pepperdine survey produced similar cost of equity results. See this article in the February 2023 issue of Business Valuation Update.

Year-end 2022 data, including equity risk premia, CRSP decile size premia, and industry betas/IRPs, are now available in BVR’s Cost of Capital Professional “common sense” platform. The goal of CCPro is to avoid “black box” of applied mathematics with transparent support for both the buildup method and CAPM calculations for any valuation date. It also gives you the flexibility to choose the start year for historical return data based on what segment of history you believe best offers a reasonable basis to make estimates of expected future returns. For a personalized demo of the platform, click here.