IVSC
JUNE 12, 2023
She was also a contributing author to the chapter "Risk-Free Rate" in the fifth edition. Alexander joined the IVSC as Director of Technical Standards (Tangible Assets) in 2019. She is a co-author of the Kroll Valuation Handbook series, now available exclusively online in the Cost of Capital Navigator.
Musings on Markets
JANUARY 19, 2022
In a post at the start of 2021 , I argued that while stocks entered the year at elevated levels, especially on historic metrics (such as PE ratios), they were priced to deliver reasonable returns, relative to very low risk free rates (with the treasury bond rate at 0.93% at the start of 2021).
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Andrew Stolz
MARCH 20, 2020
This is a Valuation Master Class student essay by Teeradon Piyakiattisuk from March 19, 2019. The formula implies the return an investor expects from a risk-free investment plus the return from the stock in relation to market volatility. The market risk premium is calculated from a market rate of return less a risk-free rate.
Musings on Markets
NOVEMBER 9, 2021
My two most recent valuations were in June 2019 and January 2020, and I am going to go back to them, not just because they are recent, but because they led to investment decisions on my part. In June 2019, Tesla had hit a rough spot, partly due to concerns about production bottlenecks and debt, and partly due to self inflicted wounds.
ThomsonReuters
MAY 6, 2021
The Codification often provides guidance on how to select a discount rate for a particular area of accounting. The Codification may require the use of a risk-free rate in some places and a risk-adjusted rate in others. Recent events have also impacted the components of the discount rate.
Musings on Markets
MAY 6, 2022
In the equity market, I capture the price of risk with a forward-looking estimate of expected returns on stocks, computed from the level of stock prices and expected future cash flows, and I graph both the expected return and the implied equity risk premium (from netting out the risk free rate) in the graph below: Implied ERP spreadsheet In equity (..)
Musings on Markets
JANUARY 21, 2023
trillion on their market capitalization at the end of 2019. To close this post, I revisited my valuation of the S&P 500 on September 23, 2022, and since much of last year's changes to the risk free rate, earnings expectations and the equity risk premium had happened by then, my value of the index has not changed much.
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