Track One (Friday)

Inflation and Russia-Ukraine Conflict: Impact on Cost of Capital Assumptions

Friday, August 19, 2022 9:20 a.m. - 11:00 a.m. MT

In the aftermath of COVID-19, inflation has reached 40-year highs in the U.S. It may take some time for the Federal Reserve to get inflation under control, and there are questions on whether long-term inflation expectations have risen permanently. The Russia-Ukraine War is placing additional pressure on global prices. In this session, we will discuss:

  • current economic conditions and recent updates to projected economic growth and inflation; 
  • impact of inflation on projected cash flows; 
  • selection of long-term growth rates in the terminal year; 
  • impact of inflation on cost of capital inputs; and
  • highlights of industries that have been most impacted by the rising inflationary environment.

After completing this session attendees will be able to: 

  • Explain how inflation impacts the two major inputs in valuation (projected cash flows and the discount rate)
  • Describe the current inflation situation in the U.S.
  • Discuss why the current environment is not typical
  • Describe why it is important to get inflation under control and the tools the Federal Reserve must use to control it
  • Identify how the Ukraine conflict is aggravating inflation in the U.S., and which industries are most and least impacted
     

Total CPE: 2
Fields of Study: Economics: 1, Finance: 1
Program Level: Intermediate - Learning activity level that builds on a basic program most appropriate for individuals with detailed knowledge in an area.

Who Should Attend:

Valuation Professionals, Accounting Professionals, Corporate Development teams, CFOs, Controllers, Finance department leaders, Investment banking professionals, Private Equity, and Hedge Fund professionals.

Prerequisites:

Previous training or research on subject matter being taught. Such persons are often at a mid-level within the organization, with operational and/or supervisory responsibilities.

Advanced Preparation:

None

Carla Nunes
Carla  Nunes

CFA

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Jim Harrington
Jim  Harrington

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