D&P issues Valuation Insights for 4Q17

BVWireIssue #182-3
November 15, 2017

The newest edition of Valuation Insights from Duff & Phelps discusses the recent change in its recommended U.S. equity risk premium (ERP). The firm decreased its recommendation from 5.5% to 5.0% for use as of Sept. 5, 2017, and thereafter, until further guidance is issued. This new rate, used in conjunction with a normalized risk-free rate of 3.5% (reaffirmed), implies a “base” U.S. cost of equity capital estimate of 8.5% (5.0% + 3.5%). Other topics in the issue include industry market multiples for North America and Europe, recent changes in unclaimed property programs in certain states, what to know about arbitration clauses, and preparing for the new IFRS 16—Leases.

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