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Data Update 8 for 2025: Debt, Taxes and Default - An Unholy Trifecta!

Musings on Markets

The Debt Trade off As a prelude to examining the debt and equity tradeoff, it is best to first nail down what distinguishes the two sources of capital. To me, the key distinction between debt and equity lies in the nature of the claims that its holders have on cash flows from the business.

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The (Uncertain) Payoff from Alternative Investments: Many a slip between the cup and the lip?

Musings on Markets

For more established private businesses, some of which need capital to grow and some of which have owners who want to cash out, the capital has come from private equity investors.

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Data Update 2 for 2023: A Rocky Year for Equities!

Musings on Markets

In this post, I will begin by chronicling the damage done to equities during 2022, before putting the year in historical context, and then examine how developments during the year have affected expectations for the future. Actual Returns Your returns on equities come in one of two forms. Stocks: The What? at the start of that year.

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A Follow up on Inflation: The Disparate Effects on Company Values!

Musings on Markets

In my last post , I discussed how inflation's return has changed the calculus for investors, looking at how inflation affects returns on different asset classes, and tracing out the consequences for equity values, in the aggregate.

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Data Update 1 for 2024: The data speaks, but what does it say?

Musings on Markets

I have also developed a practice in the last decade of spending much of January exploring what the data tells us, and does not tell us, about the investing, financing and dividend choices that companies made during the most recent year. Return on Equity 1. Dividends and Potential Dividends (FCFE) 1. Return on Equity 2.

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2023 Investment and Market Updates: A Review of the Worst Year Since 1871

Brian DeChesare

Just look at the handy chart the Financial Times put together to see the horrifically bad numbers: In January 2022, everything seemed quite frothy, with mega-deals happening left and right and crypto and equity prices still at high levels. Real Estate (Equity Funds + Owned Properties): 15% [Up 5%]. Short-Term U.S. 2020: +38%.

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How ESG Ratings Can Affect a Firm’s Cost of Equity

Reynolds Holding

2019) , for example, strong ESG performance correlates positively with higher equity returns and a reduction in downside risk. In a new paper, we address the impact of ESG ratings on a firm’s financial performance by studying how those ratings affect the cost of equity (COE). Sussman (2019). Nuttall (2019).