| Equity Risk Premium: Estimating the ERP in the Continuing Distressed Economy
Program Type: VideoCast (Audio,Video, PPT Presentation)
Program Level: Intermediate
Prerequisites: Previous training or research on subject matter being taught.
Advanced Preparation: None
Delivery Method: Group Internet-Based
CPE Credits: Two (2) Hours
Fields of Study: Business Law; Finance
Shipping Weight: 0lbs. 0oz.
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The Equity Risk Premium (ERP) has been termed "perhaps the single most important number in financial economics" (Professor Ivo Welch). The crisis that began in 2008 casts doubt on simply using Morningstar's realized risk premium data from 1926 as the basis for estimating the ERP. This webinar will address the research leading to the Delaware Chancery Court opinion in Global GT LP and Global GT LTD v. Golden Telecom, Inc. that rejected the use of the Morningstar/Ibbotson ERP of 7.1%, and instead chose the lower estimate of 6%.
After completing this webinar, attendees will be able to:
- Interpret the debate about estimating the ERP
- Evaluate market data to make their own informed estimate of ERP
- Debate the basis for the Delaware Chancery Court decision in Global GT LP and Global GT LTD v. Golden Telecom, Inc.
- Summarize impact of the crisis that began in 2008 on the ERP
- Discuss the "implied ERP" estimates provided monthly on Professor Aswath/Damodaran's website
Who Should Attend
Valuation practitioners, auditors, corporate personnel responsible for valuation analyses
Roger Grabowski, FASA
Mr. Roger J. Grabowski is a managing director at Duff & Phelps, LLC. He was formerly managing director of the Standard & Poor's Corporate Value Consulting practice, a partner of PricewaterhouseCoopers LLP and one of its predecessor firms, Price Waterhouse (where he founded its U.S. Valuation Services practice and managed the real estate appraisal practice).
He has directed valuations of businesses, interests in businesses, intellectual property, intangible assets, real property, and machinery and equipment. Mr. Grabowski has testified in court as an expert witness on matters of solvency, the value of closely held businesses and business interests, valuation and amortization of intangible assets, and other valuation issues. His testimony in U.S. District Court was referenced in the U.S. Supreme Court opinion decided in his client's favor in the landmark Newark Morning Ledger case.
Mr. Grabowski is co-author with Shannon Pratt of Cost of Capital: Applications and Examples, 5th ed. forthcoming (John Wiley & Sons, 2014); The Lawyer's Guide to Cost of Capital forthcoming (ABA, 2014); Cost of Capital: Applications and Examples, 4th ed. and Cost of Capital in Litigation: Applications and Examples. He has been the author of the annual Duff & Phelps Risk Premium Report and is co-author of the upcoming 2014 Valuation Handbook-Guide to Cost of Capital.
Mr. Grabowski teaches courses for the American Society of Appraisers including Cost of Capital, a course he developed.