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
JANUARY 5, 2024
Thus, I have treated leases as debt in computing debt ratios all through the decades that I have been computing this statistic, even though accounting rules did not do so until 2019, and capitalized R&D, even though accounting has not made that judgment yet. Beta & Risk 1. Equity Risk Premiums 2.
Musings on Markets
JULY 22, 2021
Raising or lowering the cost of capital has an effect on value, but changing my assumptions about risk premiums, betas or debt ratios has a much smaller effect that changing assumptions that alter cash flows.
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