Betafaktoren Branchenbetas Branchenmultiples Basiszinsrechner

Determination of beta factors and capital costs

The cost of capital is to be used as the discount rate when discounting cash flows relevant for valuation purposes. Determining the cost of capital is therefore a material component of company valuations. Valuation standard IDW S1 explicitly refers to the capital markets-based Capital Asset Pricing Model (CAPM or Tax CAPM) for purposes of determining cost of capital on the basis of which cost of capital may fundamentally be broken down into a base interest rate, a beta factor and a market risk premium. In this context, beta represents company-specific risk and measures price fluctuations in the single position (single position risk) compared to the market (market risk). The beta factor is determined based on a linear regression of yields. In practice, this regularly places the appraiser before a challenge: In the case of privately-held enterprises, this must be determined based on yields of suitable listed companies (“peer group”). In addition, “unlevering” and “relevering” are used to make adjustments to reflect the actual financing situation of the company being valued. The choice of peer group companies and the proper beta calculation are a constant point of discussion in cases before the courts. We determine peer groups, beta factors and cost of capital for your valuation.

Betafaktoren

Our services

  • Identification of benchmark companies and compilation of a peer group
  • Assessment of the liquidity criteria of a share
  • Determination of the levered and unlevered beta factors (2 years, 5 years) and assistance in relevering the betafactor
  • Calculation of total beta, adjusted beta, debt beta, analysis of the beta factor’s interdependence on weekdays
  • Derivation of the base rate and market risk premium
  • Calculation of trailing and forward multiples from the peer group
  • Calculation of capital costs (equity costs, borrowing costs, weighted capital costs WACC)
  • Transparent presentation of the results and report chapters for your valuation report
  • Review of your assessment of capital costs

Vorteile unserer Unternehmensbewertung

Your benefits

  • Extensive experience in the calculation of beta factors and capital costs
  • Use of professional tools for the determination of capital costs parameters
  • Reliable, IDW S-1-compliant capital costs parameters, supported by current case law
  • Transparent documentation of the results

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