Musings on Markets

FEBRUARY 23, 2025

Since the cost of capital is the discount rate that you use to discount cash flows back to get to a value, a lower cost of capital, other things remaining equal, should yield a higher value, and minimizing the cost of capital should maximize firm.

Equity 77

Equity EBITDA Risk Premium Gross Debt 77

Appraisal Rights

NOVEMBER 13, 2017

2017 WL 3712196 (Ariz. 29, 2017), Arizona’s Court of Appeals upheld the discounted cash flow analysis employed by the trial court to award a minority shareholder a higher valuation than the company had determined in resolving the shareholder’s breach of fiduciary duty claim. In Kottayil v. Insys Therapeutics, Inc.

Discounted Cash Flow 52

Discounted Cash Flow Appraisal Equity 52

Appraisal Rights

JANUARY 15, 2021

Of relevance to all investors interested in appraisal rights: How must a court deal with the “operative reality” of the company? Operative reality speaks to what is ‘actually’ occurring at the time of the challenged corporate action. We’ll continue to cover this case as the Delaware Supreme Court renders its decision.

Discounted Cash Flow 52

Discounted Cash Flow Capital Structure Appraisal Equity 52

Reynolds Holding

NOVEMBER 27, 2022

Between 2017 and 2019, thousands of crypto assets were offered to the public and others through initial coin offerings. Investors now routinely turn to crypto asset trading for portfolio appreciation and diversification, but significant investor protection concerns loom.

Marketability 56

Marketability Discounted Cash Flow Net Present Value 56

Appraisal Rights

OCTOBER 23, 2017

As reported in Law360 [$$], on October 11, 2017 the Delaware Supreme Court heard argument appealing the Chancery Court’s ruling in the ISN Software appraisal case. You can see the complete oral argument here (under the October 11, 2017, listing; ISN Software v. The Supreme Court did not rule and did not indicate when it would do so.

Appraisal 40

Appraisal Discounted Cash Flow 40

Andrew Stolz

APRIL 17, 2020

This investment style requires investors to evaluate a company’s shares through its intrinsic value with valuation methods—such as discounted cash flow analysis—and compare it to the stock’s current market price. As mentioned, the value investor’s emphasis on low valuation ratios ensures bets are as risk-averse as possible.

Dividends 52

Dividends Discounted Cash Flow Start-ups Marketability 52

Chris Mercer

JUNE 20, 2023

The equation summarizes the discounted cash flow model when CF(1) is expected to grow at the constant growth rate of G into the indefinite future, and all cash flows are reinvested in the business at the discount rate of R or paid out to investors (or some combination of reinvestment and payout).

Business Valuation 52

Business Valuation Discounted Cash Flow Appraisal Marketability 52