Cost of Capital: Applications and Examples, + Website, 5th Edition

CHAPTER 38

How Courts View Cost of Capital¹

Appraisal and Fairness Cases

Discounted Cash Flow in Delaware Law

Capital Asset Pricing Model

Components of the Weighted Average Cost of Capital

Build-up Method

Additional Points

Estate and Gift Tax Matters

Acceptance and Rejection of DCF

Evaluation of Cash Flow Forecasts

Equity Rate versus WACC

Build-up, CAPM, or Something Else?

Cost of Equity

Consistency of Data

Courts Demand Supporting Detail

S Corporations

Damages for Lost Profits

Why Discounting Is Necessary

Is a Risk-Free Discount Rate Appropriate?

Cost of Capital Is the Appropriate Risk-adjusted Discount Rate

Tax Effects

Cost of Capital in Intellectual Property Disputes

Categories of Intellectual Property Rights

Court Guidance Regarding Discount Rate Selection

Prejudgment Interest Rates

Developments in Patent Infringement Damages Law

Bankruptcy

Cost of Capital for Debt

Cost of Capital for a Business Enterprise

Family Law

Cost of Equity Capital versus WACC

Cost of Capital in Family Law Courts

Corporate Restructuring and Other Federal Tax Matters

Legal Entity Valuations

Intercompany Debt

Worthless Stock

Transfer Pricing Disputes

Ad Valorem Taxes

Company Cost of Capital versus Asset Cost of Capital

Cost of Capital in the Courts

Regulated Industries

Role of Cost of Capital

Specific Factors Impacting the Cost of Equity Capital

Railroad Cost of Capital Issues

APPRAISAL AND FAIRNESS CASES²

The cost of capital is a central issue in business valuations in statutory appraisal, stockholder ...