Kroll International Cost of Capital Module

Source:

The Kroll International Cost of Capital Module, part of the Cost of Capital Navigator platform, compiles its data from a combination of proprietary research, historical financial market data, and publicly available sources. This module is designed to assist valuation professionals in estimating the cost of capital for companies operating outside the United States.

Key Data Sources and Components

1. International Cost of Capital Inputs:

• Country Risk Premia (CRPs): Derived from models such as the Country Yield Spread (CYS), Country Credit Rating (CCR), and Relative Volatility (RV) models. These models incorporate data from sources like BMI, a Fitch Solutions company, and sovereign credit ratings from major agencies.
• Risk-Free Rates: Typically sourced from government bond yields of respective countries.
• Equity Risk Premia (ERPs): Based on historical analyses of equity returns over risk-free rates in various markets.
• Relative Volatility Factors: Calculated using the volatility of country-specific equity markets relative to a global benchmark.
• Long-Term Inflation Expectations: Sourced from international financial institutions and central banks.
• Statutory Tax Rates: Collected from governmental and international financial databases.

2. International Industry Benchmarking:

Provides industry-level data for over 200 industries across four global regions, including:

• Cost of equity, cost of debt, and weighted average cost of capital (WACC) estimates.
• Performance statistics and ratio analyses.
• Valuation multiples and capital structure inputs.
• International Company-Level Betas:
• Offers betas for over 35,000 companies in more than 110 countries, allowing users to:
• Select peer groups within specific industries.
• Calculate levered, unlevered, and relevered betas.
• Perform sensitivity analyses using different currencies, stock return frequencies, lookback periods, and market indices.

Available from: BVDataWorld and KeyValueData.