Kroll is the leading global independent valuation services firm and a trusted expert on estimating cost of capital. For over 20 years, our professionals have published books and articles, created studies, provided recommendations, produced datasets, and built tools to help businesses and valuation professionals quantify risk and arrive at cost of capital conclusions.
Quantifying risk is essential in any valuation analysis and no easy task. While the result may be subsumed into a single input in a valuation analysis, getting it wrong can make or break an investment decision or materially impact a valuation conclusion. While corporate finance theory has established some generally accepted approaches for calculating cost of capital, multiple complex models have been developed to establish the required inputs, and numerous books and articles have been published on this topic. It remains one of the most complex corporate finance concepts today.