Cost of capital

In-house developed evaluation tools

BaseRateGuide

(Base Rate Calculator)

When calculating the cost of capital using the CAPM (Capital Asset Pricing Model), one of the factors to be determined is the so-called base rate. It represents the interest rate of a (quasi-) risk-free capital market investment and is therefore often also referred to as the risk-free or base rate.

According to the recommendation of IDW S1 in the version of 2008, the base rate is to be determined on the basis of (modelled) interest structure curves when determining the objectified enterprise value. Of practical importance is the so-called Svensson method, which is a direct estimate of the interest rates of hypothetical zero-coupon bonds (zero bonds) for different maturities. According to this method, the interest rate is defined as a function of six parameters, which have been published by the Deutsche Bundesbank on each trading day since 1997.

WOLLNY WP has developed the BaseRateGuide®, which can be used to calculate the yield curve, period-specific base rates and the present-value-equivalent base rate on a reporting date.

Data source for the Svensson parameters are the time series BBK01.WT3201-WT3206 of the Deutsche Bundesbank.

Our service for you:  DThe BaseRateGuide® is provided free of charge. Start the BaseRateGuide® here.

Note: We accept no liability for the use of the base rates determined with the WOLLNY WP BaseRateGuide®.

Industry betas

We calculate monthly sector beta factors for the 24 sectors of the S&P Europe Broad Market Index (European sector betas) and make this information available in summarised form as monthly outputs.

Sector betas are calculated by regressing a sector index against a broad market index. The companies included in the individual sector indices regularly have a broad spread in terms of their product and service spectrum. The reference to the activity and risk profile of the valuation object …

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Industry multiples

We calculate monthly sector multiples for the 24 sectors of the S&P Europe Broad Market Index (European sector multiples) and make this information available in summarised form as a monthly output.

Multiples derived from P&L performance indicators (e.g. sales, EBIT) can be used to examine the plausibility of company valuations. However, these cannot take the place of a company valuation, as they only serve as approximate values.

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ValueGuide

(Enterprise Value Calculator)

The ValueGuide® was developed by WOLLNY WP and offers the following possibilities as a tool for the approximate determination of company values according to the income capitalization approach:

  • Distribution planning in three phases:
    • Detailed distribution planning (3 years),
    • lump sum distribution planning (years 4-10) and
    • terminal value (from year 11).
  • Differentiated planning of prime rate, risk premium and beta factor separately for planning phases 1 to 3.

Our service for you: The ValueGuide® is provided free of charge. Start the ValueGuide® here..

Note: The rough calculation of company values with ValueGuide® does not replace a valuation report. Company values are highly dependent on the planning and valuation assumptions made. A company valuation therefore always includes a thorough analysis of the company and the market, the preparation of a business plan and the derivation of the company-specific cost of capital.