The Duff and Phelps Risk Premium Report
is an invaluable resource for developing equity
risk premiums for small companies. The Risk Premium
Report PLUS the Risk Premium Analyzer
is now available from ValuSource. The data can be used by
both Excel users and ValuSource software users, including
ValuSource Pro, Business Valuation Manager Pro and Express
Business Valuation. The Risk Premium Report is gaining in
popularity among valuators and you can no longer afford
to ignore this approach to developing equity risk premiums.
Price
$ 315
Overview
A premium resource for determining discount
rates, the Risk Premium Report provides equity risk premiums
for companies sized by eight different criteria:
Market capitalization
Book value
Net income
Market Value of Invested Capital
Total assets
EBITDA
Sales
Number of employees
The underlying data for the Risk Premium Report is drawn
from both the CSRP and Compustat databases, covering 42
years (1963 – 2005) years of financial reports from companies
listed on the New York Stock Exchange, the NASDAQ and the
AMEX.
The Risk Premium Report (originally the Standard & Poor's
Corporate Value Consulting Equity Risk Premium Report) is
produced annually by Duff and Phelps LLC, a leading provider
of independent financial advisory and investment banking
services. The Report is authored by Roger Grabowski, a managing
director of Duff & Phelps, and David King, managing director
of Mesirow Financial.
In selecting the data for their analysis, the authors have
segregated high risk companies into a separate “portfolio”
and de-selected companies de-listed from their exchanges
and other companies whose data would tend to skew the risk
premium curve (companies with 5 year negative EBITDA, companies
with less than 5 years reported data, etc.). The remaining
companies are then divided into 25 “portfolios” based on
size, using eight alternate measures for size.
The ValuSource Difference
– Risk Premium Analyzer
Like other vendors, ValuSource distributes
the Risk Premium Report as an Adobe Acrobat (.pdf) file.
ValuSource has made the Risk Premium Report even easier
for the valuator to use by adding the Risk Premium Analyzer
Tool, which includes:
Data: All the Risk Premium Report Exhibits data
(including regression formulas) is loaded into the
Risk Premium Analyzer Excel workbook.
Analyzer Tool: The Risk Premium Analyzer Tool
automatically calculates three risk premiums for
your subject company for each size parameter you
enter: Build-Up Model, CAPM, and an additional size
premium.
Why you need the Risk Premium Report and
Risk Premium Analyzer
The Duff and Phelps Risk Premium
Report has gained wide acceptance as a source of risk
premium data and should also be considered, along with
SBBI, in the process of determining accurate and defensible
risk premiums. Using the ValuSource Risk Premium Analyzer,
you will have access to a powerful new source for determining
appropriate risk premiums for your valuation engagements.
“ValuSource
has done a terrific job creating the Risk Premium
Analyzer, which makes the Risk Premium Report
an even more valuable resource.”
Roger J. Grabowski, ASA, Managing Director,DUFF & PHELPS
Duff and Phelps Risk Premium Report
and ValuSource’s Risk Premium Analyzer work with
the following products:
