We are pleased to announce the publication of the 2012 Duff & Phelps Risk Premium Report. Now in its 17th year of publication, the Risk Premium Report continues to be at the forefront in providing comprehensive valuation methodology and data. 1,2
The 2012 Duff & Phelps Risk Premium Report includes data available through December 31, 2011, and should be used for calendar year 2012 valuations. Archived versions of the Risk Premium Report (1996-2011) are available through our Distributors (see purchasing information below).
Who Should Use the Duff & Phelps Risk Premium Report
The Duff & Phelps Risk Premium Report is designed to assist financial professionals in estimating the cost of equity capital ("cost of equity", or "COE") for a subject company. 3 The risk premia and size premia published in the Risk Premium Report can be used to develop levered and unlevered COE estimates using both the build-up method and the Capital Asset Pricing Model (CAPM).
In addition to the traditional professional valuation practitioner, the Risk Premium Report and the accompanying web-based Risk Premium Calculator (more information below), are designed to serve the needs of:
The Risk Premium Report features three studies that analyze returns based on company size and upon fundamental company risk:
Recent Changes and Additions
The most significant recent enhancement to the Report is the development of the web-based Duff & Phelps Risk Premium Calculator (introduced in 2011). The online Risk Premium Calculator makes using the Risk Premium Report even easier, and saves time. The online Risk Premium Calculator:
The online Risk Premium Calculator then provides full sourcing and documentation of cost of equity capital (COE) estimates for your subject company:
Also new in the 2012 Duff & Phelps Risk Premium Report:
Publication/Purchasing Information
Published by:
Duff & Phelps, LLC
311 South Wacker Drive
Suite 4200
Chicago, IL 60606
+1 312 697 4600
www.duffandphelps.com
The 2011 Duff & Phelps Risk Premium Report may be purchased from our Distributors*
Business Valuation Resources (BVR) | www.bvresources.com/dp | +1 888 287 8258
ValuSource | www.valusource.com/RPP | +1 800 825 8763
Morningstar | www.global.morningstar.com/RiskPremiaReports | +1 888 298 3647
* The Duff & Phelps Risk Premium Report is intended to be used as a companion publication to the web-based Duff & Phelps Risk Premium Calculator. The online Risk Premium Calculator is available through Business Valuation Resources (BVR) and ValuSource only.
1.The Duff & Phelps Risk Premium Report is based on a series of articles published by Roger Grabowski and David King, culminating with a seminal 1996 article and a subsequent article in 1999 which together served as the Report's foundation. See: Roger J. Grabowski and David King, "New Evidence on Size Effects and Equity Returns", Business Valuation Review (September 1996, revised March 2000), & Roger J. Grabowski and David King, "New Evidence on Equity Returns and Company Risk", Business Valuation Review (September 1999, revised March 2000).
2.Published as the Standard & Poor's Corporate Value Consulting Risk Premium Report for reports titled 2002 through 2004 and as the PricewaterhouseCoopers Risk Premium Report and the Price Waterhouse Risk Premium Report for reports prior to 2002.
3.For detailed discussion of cost of capital issues see Cost of Capital: Applications and Examples 4th ed. by Shannon Pratt and Roger Grabowski, Wiley (2010).
4.20-year constant maturity Treasury bond yield as of your valuation data. Source: The Board of Governors of the Federal Reserve System.
5.Duff & Phelps does not publish IRPs. A source of IRPs is Morningstar's Ibbotson SBBI Valuation Yearbook, (Chicago, Morningstar), Chapter 3, "The Buildup Method", Table 3-5.
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