AIC23 BV - Valuations in a High Inflation Environment: Update on Cost of Capital Assumptions

Session Description

This session will provide an update on key inputs needed to perform valuations during a period of high inflation. Although at a slower pace, major central banks are continuing to raise interest rates to tame high inflation, which reached levels not seen in 30 to 40 years in some countries. Inflation appears to have peaked towards the end of 2022, but it is not expected to fall back to the target 2% in the immediate future, with the Fed vowing not to cut interest rates in 2023. Economists have severely downgraded real growth expectations for 2023 relative to a year ago. Amidst this highly uncertain environment, cost of capital estimates increased during 2022 and will remain higher in 2023 relative to pre-pandemic. Valuation professionals will need to carefully review cash flow projections to reflect the impact of inflation and adjust cost of capital assumptions accordingly.

Speaker

Carla Nunes, CFA, ABV | Managing Director | Kroll LLC
James P. Harrington | Director | Kroll LLC

Continuing Education

Review of this session recording will award 1 CE hour. 

CPE credit is not awarded for this pre-recorded offering.