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Cost of Capital Having Large Impact on Prices of Financial Assets
January 17th, 2024 by hackel

Our company has a unique approach to estimating the cost of capital. We believe that we have delved deeper into this matter than any other advisor. To make sure, feel free to ask other advisors about their precise method of calculating the equity cost of capital, including worksheets. While academia has also touched upon this topic, most focus has been on naive GAAP data and relatively simple approaches. It is essential to understand that even a one percentage point difference in the cost of capital can lead to a fair value variation of fifteen to thirty percent, depending on the current price of capital. Therefore, we must consider this aspect when determining a reasonable value estimate.

Become a CT Capital client today and understand our history of outperformance of benchmarks with considerably lower risk


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