DACH Capital Market Study

Munich (2 October 2020)

ValueTrust released the seventh edition of the DACH Capital Market Study (Version: June 30, 2020), which was created and published by ValueTrust in cooperation with the Institute of Auditing and Sustainability Accounting of the JKU Linz and finexpert.

The DACH Capital Market Study valuation parameters and cost of equity are derived in a comprehensive manner to provide a sound basis for investment decisions, even more relevant than usual in the current volatile economic environment. Cost of equity are derived according to four different methodologies for twelve different sectors in our DACH Capital Market Study:

  • Considering all essential capital cost parameters (risk-free rate, beta factors of different industries, market risk premium) for the application of the Capital Asset Pricing Model (CAPM) the cost of equity are derived according to the CAPM for each sector;
  • Based on future-oriented earnings estimates by analysts implicit cost of equity for the different sectors are analyzed;
  • Historical total shareholder returns are shown for the market as a whole and for the individual sectors, which can be considered historical cost of equity;
  • The valuation levels, in form of stock market multiples, for the various sectors are displayed. However, multiples can not only be used for determining valuation levels, but by building the inverse value, it can be used as an approximation for the equity cost of capital.

The studies are of great value to finance executives, supervisory boards and valuation professionals within the transaction (M&A) business, the internal performance-measurement as well as for accounting purposes. The cost of capital parameters and valuation multiples, which were analyzed in the ValueTrust DACH Capital Market study, are easily accessible online at www.firmvaluation.center/parameter. Additionally, further knowledge and information for financial decision making is provided at www.finexpert.info.