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Cost of Capital Study 2011/2012

The sovereign debt crisis in Europe has called into question the initial signs of an economic recovery. The future economic development is uncertain and the volatility of the capital markets is continuously increasing. The short- and medium-term outlook is extremely unstable. An adequate incorporation of the current risks and uncertainties in budget figures is a significant challenge to the corporate decision-makers. In this context, cost of capital plays an integral role.

Cost of Capital Study 2011/2012
KPMG Transaction & Restructuring is delighted to publish the sixth edition of the Cost of Capital Study in 2012. Interesting developments in this field can be seen in the study due to the substantial turnout of 137 European companies. The study is based on a very high response rate of about 35% in Switzerland and may be regarded as being representative for all other companies. This study has become a standard reference point in business practice.

The results of this year’s study show that, in the middle of last year, companies still expected a positive development in the overall economic situation. Many forecasts need to be revised over the coming months in light of the recent economic developments (Sovereign debt and Euro crisis). As a result the impairment test topic will remain a key focus area.

In particular, companies should pay attention to the following aspects:
- Cost of capital has to be reviewed on an aggregated level in order to assess value-related corporate decisions
- Cost of capital needs to be consistent with the budget figures in order to adequately reflect the current market volatility

Download the full survey:

Mercredi 6 Juin 2012

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