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2017 Valuation Handbook - International Industry Cost of Capital

ISBN: 978-1-119-36673-7
1008 pages
October 2017
2017 Valuation Handbook - International Industry Cost of Capital (1119366739) cover image

Description

Real-world cost of capital data from across industries and around the globe

The 2017 Valuation Handbook – International Industry Cost of Capital offers the same type of rigorous industry-level analysis published in the U.S.-centric Valuation HandbookU.S. Industry Cost of Capital. It provides industry-level cost of capital estimates (cost of equity, cost of debt, and weighted average cost of capital, or WACC), plus detailed industry-level statistics for sales, market capitalization, capital structure, various levered and unlevered beta estimates (e.g., ordinary-least squares (OLS) beta, sum beta, peer group beta, downside beta, etc.), valuation (trading) multiples, financial and profitability ratios, equity returns, aggregate forward-looking earnings-per-share (EPS) growth rates, and more.

For more information about Duff & Phelps valuation data published by Wiley, please visit www.wiley.com/go/valuationhandbooks.

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Key Features
  • Four global economic regions: The 2017 Valuation Handbook – International Industry Cost of Capital includes industry-level analyses for four global economic regions: the "World," the European Union, the Eurozone, and the United Kingdom. Industries in the book are identified by their Global Industry Classification Standard (GICS) code (at the 2-, 4-, and 6-digit code level).
  • Three currencies: Each of the four global region's industry analyses are presented in three currencies: the Euro, the British pound, and the U.S. dollar.
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Table of Contents

Acknowledgements xiii

Introduction 1

Who Should Use the Valuation Handbook – International Industry Cost of Capital 2

Industry-level Cost of Capital Estimates 3

Industry-level Statistics, Capital Structure, Valuation Multiples, and Betas 4

New in the 2017 Valuation Handbook – International Industry Cost of Capital 4

Methodology 5

“Data Through” Date 5

Countries of Incorporation 5

Company Type 5

Currencies Used 5

Global Areas Covered 6

Industry Identification by GICS Code 9

Minimum Number of Companies Required 10

Data Sources 10

Derivation of Long-term Risk-free Rates and Long-term Equity Risk Premia 13

Company Screening Process 16

Identifying Initial Company Sets 17

Additional Company Screening 18

Medians and Industry Composites 23

“Latest” and “5-Year” Averages 26

Calculation of Industry Financial Statistics 31

GICS Code and Number of Companies in the Main Set 31

Global Area and Currency 31

Graph – Relative 5-Year Performance 31

Three Largest and Three Smallest Companies by Sales and Total Assets 31

Annualized Monthly Performance Statistics 31

Number of Companies in the Median, the Composites, and the High-Financial-Risk Category 33

Return Ratios 34

Liquidity Ratio 38

Profitability Ratio 39

Graph – Operating Margin 39

Beta Overview 40

Levered Betas 41

Adjusted Betas 45

Graph – Betas (Levered ) 47

Unlevered Betas 48

Leverage Ratios 49

Graph – Capital Structure, GICS Composite 53

Derivation of Long-term Growth Rates 53

Equity Valuation Multiples 54

Enterprise Valuation (EV) Multiples 61

Graph – Enterprise Valuation Multiples 66

Long-term Risk-free Rates and Long-term Equity Risk Premia 66

Cost of Capital Estimates 68

CAPM 68

Discounted Cash Flow (DCF) Models 70

1-Stage DCF 70

3-Stage DCF 72

Cost of Debt 75

Weighted Average Cost of Capital (WACC) 78

WACC Calculations 82

WACC – Graph 83

Appendix A

Definitions of Standard & Poor’s Global Vantage Database Data Items Used in Calculations

Industry Data Exhibits

World Company Set

Industry Data Exhibit 1: World Company Set, in € EUR

Industry Data Exhibit 2: World Company Set, in £ GBP

Industry Data Exhibit 3: World Company Set, in $ USD

European Company Set

Industry Data Exhibit 4: European Union, in € EUR

Industry Data Exhibit 5: European Union, in £ GBP

Industry Data Exhibit 6: European Union, in $ USD

Eurozone Company Set

Industry Data Exhibit 7: Eurozone, in € EUR

Industry Data Exhibit 8: Eurozone, in £ GBP

Industry Data Exhibit 9: Eurozone, in $ USD

United Kingdom Company Set

Industry Data Exhibit 10: United Kingdom, in € EUR

Industry Data Exhibit 11: United Kingdom, in £ GBP

Industry Data Exhibit 12: United Kingdom, in $ USD

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