Musings on Markets

JUNE 2, 2025

As recently as the early 1980s, only about thirteen governments, mostly in developed and mature markets, had ratings, with most of them commanding the highest level (Aaa). The ratings agencies provide tables that list defaults by rating that back the proposition that sovereign ratings and default are highly correlated.

Risk Premium 116

Risk Premium Marketability Start-ups Risk-free Rate 116

Musings on Markets

JANUARY 21, 2023

The premium that investors demand over and above the risk free rate is the equity risk premium , and practitioners in finance have wrestled with how best to estimate that number, since it is not easily observable (unlike the expected return on a bond which manifests as a current market interest rate).

Equity 95

Equity Risk Premium Start-ups Dividends 95

Musings on Markets

JANUARY 5, 2024

Employee Count & Compensation I nvesting Principle Financing Principle Dividend Principle Hurdle Rate Project Returns Financing Mix Financing Type Cash Return Dividends/Buyback s 1. Beta & Risk 1. Equity Risk Premiums 2. Ratings & Spreads 2. Tax rates 4. Return on Equity 1. Debt Details 1.

Dividends 106

Dividends Risk Premium Equity Book Value 106

Musings on Markets

OCTOBER 4, 2023

Price of Risk The drop in stock and bond prices in the third quarter of 2023 can partly be attributed to rising interest rates, but how much of that drop is due to the price of risk changing? My assessment is a bit of a cop-out, since they are built on current interest rate levels and consensus earnings estimates.

Marketability 123

Marketability Start-ups Risk Premium Treasury 123

Musings on Markets

JANUARY 31, 2024

In my last three posts, I looked at the macro (equity risk premiums, default spreads, risk free rates) and micro (company risk measures) that feed into the expected returns we demand on investments, and argued that these expected returns become hurdle rates for businesses, in the form of costs of equity and capital.

Equity 82

Equity Book Value Start-ups Corporate Finance 82

Musings on Markets

JANUARY 24, 2024

As we start 2024, the interest rate prognosticators who misread the bond markets so badly in 2023 are back to making their 2024 forecasts, and they show no evidence of having learned any lessons from the last year.

Treasury 52

Treasury Risk Premium Start-ups Risk-free Rate 52

Valutico

DECEMBER 12, 2023

See below for the latest set of upgrades and watch this space in early 2024 for more to come soon. New Professional Report Style: What? Stay tuned for more exciting and significant updates coming in early 2024. We’ve completely modernized the report style, ensuring a more user-friendly experience. Why Important?

Risk-free Rate 52

Risk-free Rate Risk Premium Market Risk Marketability 52