Rights Contact Login For More Details
More About This Title 2015 Valuation Handbook: Industry Cost of Capital
English
The New Standard Source of Industry-level Analysis
The 2015 Valuation Handbook ‒ Industry Cost of Capital includes cost of capital estimates (equity capital, debt capital, and weighted average cost of capital, or WACC) for over 200 U.S. industries, plus a host of detailed statistics that can be used for benchmarking purposes,
Don't Forget the Quarterly Updates
The hardcover 2015 Valuation Handbook - Industry Cost of Capital includes U.S. industry data updated through March 2015. This critical analysis is updated quarterly with data through June, September, and December. Ensure that you are using the most up-to-date data and information available: add the Quarterly Updates and keep your data library current.
Also Available
- 2015 Valuation Handbook - Guide to Cost of Capital
- 2015 International Valuation Handbook - Guide to Cost of Capital
- 2015 International Valuation Handbook - Industry Cost of Capital
Key Features
- Over 200 U.S. industries analyzed: The 2015 Valuation Handbook ‒ Industry Cost of Capital provides comprehensive, detailed industry-level analyses that can be used for benchmarking purposes. Over 200 U.S. industries organized by standard industrial classification (SIC) code are presented.
- Up to 8 separate cost of equity and WACC estimates, plus cost of debt, by industry: The 2015 Valuation Handbook ‒ Industry Cost of Capital provides cost of equity capital and WACC estimates for each industry using multiple estimation models (various build-up models, CAPM, CAPM adjusted for size, 1-stage and 3-stage discounted cash flow (DCF) models, and Fama-French multi-factor model). Cost of debt is also estimated for each industry.
- Industry and peer group betas: The 2015 Valuation Handbook ‒ Industry Cost of Capital provides levered and unlevered beta estimates for each industry (e.g. ordinary-least squares (OLS) beta, sum beta, downside beta, etc.), plus peer group betas adjusted to the industry average based upon statistical quality.
- Additional industry statistics: The 2015 Valuation Handbook ‒ Industry Cost of Capital provides detailed statistics for sales, market capitalization, capital structure, valuation (trading) multiples, financial and profitability ratios, equity returns, aggregate forward-looking earnings-per-share (EPS) growth rates, and more.
- Analysis of off-balance-sheet debt: The 2015 Valuation Handbook ‒ Industry Cost of Capital includes a separate analysis of "off-balance-sheet" debt by industry (capitalized operating leases and unfunded pension liabilities),
- Analysis of high-financial-risk companies: The 2015 Valuation Handbook ‒ Industry Cost of Capital includes a separate analysis of "high-financial-risk" companies by industry.
English
Roger J. Grabowski, Managing Director of Duff & Phelps LLC, is a major speaker at conferences and has testified in court as an expert witness on the value of closely held businesses and business interests, matters of solvency, valuation and amortization of intangible assets and other valuation issues. He testified in the Northern Trust case, the first U.S. Tax Court decision that adopted the discounted cash flow method to value the stock of a closely-held business with the discount rate based on the capital asset pricing model. Roger authors the annual Duff & Phelps' Risk Premium Report.
James P. Harrington, Director in the Office of Professional Practice at Duff & Phelps, is an accomplished financial writer and analyst. He provides technical support on client engagements involving cost of capital and business valuation matters, and leads efforts for development of Duff & Phelps’ studies, surveys, online content and tools, and internal models. He is also the co-developer of the online Duff & Phelps Risk Premium Calculator, which is based on the data and methodology of the Duff & Phelps Risk Premium Report. Prior to joining Duff & Phelps, Harrington was the Director of Valuation Research in Morningstar’s Financial Communications Business, leading the group that produces the widely used and cited Ibbotson SBBI Valuation Yearbook and Ibbotson SBBI Classic Yearbook, the Ibbotson Cost of Capital Yearbook, the Ibbotson Beta Book, and various international and domestic reports. Prior to Morningstar, he was a product manager in the financial communications group at Ibbotson Associates. Before that, he was a bond and bond portfolio analyst, and also worked at the Chicago Board of Trade in the bond options pit for a filling group.English
Acknowledgements viII
Introduction 1
Who Should Use the Valuation Handbook – Industry Cost of Capital 1
Industry-Level Cost of Capital Estimates 2
Industry-Level Statistics, Capital Structure, Valuation Multiples, and Betas 2
Analysis of Capital Structure Including Off-Balance-Sheet Liabilities 3
New in the 2015 Valuation Handbook ;; Industry Cost of Capital 3
Methodology 4
“Data Through” Date 4
County of Incorporation 4
Company Type 4
Industry Identification by SIC Code 4
Minimum Number of Companies Required 5
Data Sources 5
Company Screening Process 9
Medians and Industry Composites 14
“Latest” and “5-Year” Averages 17
Calculations of Industry Financial Statistics 22
Three Largest and Three Smallest Companies by Sales and Total Assets 22
Annualized Monthly Performance Statistics 22
Number of Companies in the Median, the Composites, and the High-Financial-Risk Category 23
Return Ratios 24
Liquidity Ratio 27
Profitability Ratio 28
Growth Rates 29
Beta Overview 30
Levered Betas 31
Adjusted Betas 34
Unlevered Betas 36
Equity Valuation Multiples 38
Enterprise Valuation (EV) Multiples 41
Fama-French (F-F) 5-Factor Model 46
Cost of Debt 48
Leverage Ratios 49
Cost of Equity Capital Estimates 53
CAPM 54
Cost of Equity Capital Estimates ;; Using the CRSP Deciles Size Study 55
CAPM + Size Premium 56
Build-up Method 58
Cost of Equity Capital Estimates ;; Using the Risk Premium Report Study 60
CAPM + Size Premium 60
Build-up 1 Method 63
Discounted Cash Flow (DCF) Models 65
1-Stage DCF 65
3-Stage DCF 67
Fama-French (F-F) 5-Factor Model 70
Weighted Average Cost of Capital (WACC) 72
WACC Calculations 75
Exhibit 11: Distribution of Company-level Average WACC by Industry 78
Exhibit 12: Average and Median of Company-level Average WACC by Industry for “Healthy” Companies and “High-Financial-Risk” Companies 79
Appendices
Appendix A Relative Impact of Off-Balance-Sheet Debt-Equivalent Liabilities on the Capital Structure, as Measured by Total Capital
Appendix B Leverage Ratios and Unlevered Betas Calculated Using (i) Book Debt, and (ii) Book Debt Plus Off-Balance-Sheet Debt
Appendix C Definitions of Standard and Poor’s Compustat Data Items Used in Calculations
Industry Data Exhibits
Division A: Agriculture, Forestry, and Fishing
Division B: Mining
Division C: Construction
Division D: Manufacturing
Division E: Transportation, Communications, Electric, Gas, and Sanitary Services
Division F: Wholesale Trade
Division G: Retail Trade
Division H: Finance, Insurance, and Real Estate
Division I: Services
Size Groupings: Large-, Mid-, Low-, and Micro-Capitalization Companies
