It’s always been a challenge to estimate the cost of capital in non-U.S. markets because of a lack of data and tools. When Morningstar discontinued its international cost of capital products, the task got even tougher. Fortunately, there’s now a replacement resource—and it provides even more material than was available before.
Three resources in one: The 2014 International Valuation Handbook - Guide to Cost of Capital from Duff & Phelps gives you all the data that were in three separate reports now discontinued by Morningstar/Ibbotson: the International Cost of Capital Report, International Cost of Capital Perspectives, and the International Equity Risk Premium Report. Plus, the data have been enhanced, according to D&P’s Jim Harrington. “In the 2014 International Valuation Handbook - Guide to Cost of Capital, we calculate country-level cost of equity capital from the perspective of investors based in 55 countries investing into 179 countries,” he says. The old Morningstar products provided the data from the perspective of investors in only six countries, so this is “much more powerful” than what was published before.
Another step up from the old reports is that data in the D&P book are reported for all four quarters of the year. In the prior Morningstar products, data were reported as of December and March but then only for certain models. The D&P hardcover book has data for all models through December and March—plus optional semiannual updates that include data through June and September.
There are also more examples than in the old Morningstar reports. “We have lots of detailed examples in the book about how to use the data,” says Harrington, which is of “enormous importance” to appraisers. “The data is great, but appraisers need to know the proper way to use it.”
Free webinar: Join Jim Harrington on Thursday, January 15, for International Valuation Handbook: The Final Installment of the Duff & Phelps Trilogy, a free, one-hour webinar that provides a detailed look at what’s included in the new 2014 International Valuation Handbook and offers insight into how it can be leveraged by appraisers.Can't make it to the webinar? Register for it anyway and you'll receive the presentation materials and information on how to access a free recording.
For more details on the book and how to order, click here.
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