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