FVC2120. COVID-19 and the Path to Recovery — Lessons Learned About Cost of Capital

COVID-19 has had a profound and ongoing impact on financial markets and economies around the world. The recession that ensued was the worst since World War 2, but the recovery has been fast by historical patterns in places like the U.S. and China, due to the unprecedent support provided by monetary and fiscal policies. This session covers some of those trends and their impact on cost of capital assumptions and related valuation considerations.

Learning Objectives:

• Describe the impact of fiscal policy on real GDP growth during the COVID-19 pandemic and subsequent recovery
• Discuss the impact of major central banks’ monetary policies on safe-haven government bond yields
• Identify industries most impacted by the pandemic and those benefitting from the recovery
• Evaluate the adjustments that may be needed to projected growth in cash flows and discount rates