Two sources of industry betas were introduced this week in BVR’s Cost of Capital Professional (CCPro) to help in estimating the industry risk premium (IRP) component of the buildup method for developing the cost of capital for a private company. CCPro users can choose either source to derive the IRP the platform calculates, or they can input an IRP they develop on their own.
Two sources: A CCPro user has the choice of using betas published by Professor Aswath Damodaran (New York University Stern School of Business) or Salvidio & Partners. Dr. Damodaran is known as the ‘dean of valuation’ and is widely respected by the business valuation community. Salvidio & Partners, a Rome, Italy-based business valuation firm headed by Ascanio Salvidio, produces a quarterly report on levered and unlevered industry betas for 134 industries in North America, the EU, and Western Europe.
Meanwhile, the 2019 edition of the Duff & Phelps Valuation Handbook - International Guide to Cost of Capital was released last week and is available for $675 USD. The handbook provides inputs and methodology to enable analysts to ‘assess risk and develop cost of capital estimates.’ Exhibits provide country-level risk premia, relative volatility analyses, and equity risk premia (ERPs).
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