Market participants' outlook on the future size, timing, and risk profile of returns from their investments significantly influences market prices and valuation model inputs. Ongoing political uncertainties, widening market divergence, and the impact of emerging megatrends on business models adds layers of complexity to the financial landscape.
Consequently, this year's Cost of Capital Study is dedicated to uncertainties in financial markets and growth perspectives and appears under the title "The New Dilemma: Balancing Interest Rates and Growth".
We are pleased to present you with the results of the nineteenth edition of our Cost of Capital Study. This year, we have once again attracted a significant number of participants, with approximately 300 companies contributing to the study, reinforcing the credibility and reliability of our findings.
In the current issue, we examine the impact of a persistently uncertain market environment on the interplay between interest rate developments and growth expectations, as well as the effects on business models, corporate development, and long-term return expectations (cost of capital). In this context, the current issue of the study focuses on the following subjects:
- Market dynamics unveiled? The impact of divergence, resilience, and inflation on return expectations.
- Inflation defeated? Inflation again proves particularly persistent toward the end of inflationary periods.
- Growth or stagnation? The coming years will reveal whether Europe's anaemic growth is cyclical or structural.
We trust that this year's Cost of Capital Study will not only meet your expectations but also provide practical and actionable insights that can be applied to your work in the finance sector.
