Title Details

SHANNON P. PRATT, PhD, is a founder and Managing Director of Willamette Management Associates, one of the oldest and largest independent valuation consulting, economic analysis, and financial advisory firms, with offices in principal cities across the United States. Over a distinguished career of more than three decades, he has performed valuation engagements for M&A, ESOPs, and numerous other purposes. He has testified in a wide variety of federal and state courts across the country and frequently participates in arbitration and mediation proceedings. Dr. Pratt is one of the most successful and respected authors in his field. He is coauthor of several industry standards, including Valuing a Business and Valuing Small Businesses and Professional Practices. He is also Editor-in-Chief of Shannon Pratt's Business Valuation Updates, the primary monthly newsletter in the field of business valuation.

Partial table of contents:

COST OF CAPITAL BASICS.

Defining Cost of Capital.

Net Cash Flow: The Preferred Measure of Return.

Discounting versus Capitalizing.

Cost Components of a Company's Capital Structure.

Weighted Average Cost of Capital.

ESTIMATING THE COST OF EQUITY CAPITAL.

Build-Up Models.

Proper Use of Betas.

The Size Effect.

The Arbitrage Pricing Model.

OTHER TOPICS RELATED TO COST OF CAPITAL.

Handling the Discount for Lack of Marketability.

Common Errors in Estimation and Use of Cost of Capital.

Appendices.

Index.