Cost of capital

We have significant expertise on the cost of capital. This includes both estimating the optimal cost of employing capital as well as understanding and interpreting cost of capital analysis put forward by our clients or their stakeholders.

Our analysis is robust, objective and internally consistent. We can therefore provide advice which is credible and independent, and valued and respected by all sides of the debate.

We are technically adept in employing the various techniques for estimating the cost of capital. These range from the standard Capital Asset Pricing Model (CAPM) to alternative techniques such as the dividend growth model (DGM), Value At Risk (VAR) model or Monte Carlo simulation.

We often use this specialist expertise to help clients operating within regulated sectors, where it is significantly enhanced by our deep understanding of the wider regulatory and policy context. This enables us to help clients focus on the most relevant and powerful arguments to make their case within their regulatory consultation, appeal or market investigation.

Our proficiency in estimating and interpreting the weighted average cost of capital (WACC) is called upon in many different types of projects, not just those in the regulatory arena. It can therefore be relevant for projects which also require:

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