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Discount Rate—Explanation, Definition and Examples

Valutico

In this article, we’ll cover the basics of what a discount rate is and where it’s used. More importantly, we’ll dig deeper into how discount rates can influence investment choices and how they’re used to figure out a company’s worth. What is a discount rate?

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Data Update 3 for 2023: Inflation and Interest Rates

Musings on Markets

The US treasury market, considered by some still as a safe haven, was anything but safe or a haven, especially at the long maturities, as long term rates soared, with inflation (not the Fed) being the key driver. That is good advice in most years, but 2022 was not one of those years.

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IVSC Valuation Webinar Series 2024, Sponsored by Kroll

IVSC

Monetary policy across major markets, including the pace and timing of interest rate cuts by major central banks will have a material impact on risk-free rates, a key input for valuations across multiple asset classes.

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Interest Rates, Earning Growth and Equity Value: Investment Implications

Musings on Markets

The first has been the steep rise in treasury rates in the last twelve weeks, as investors reassess expected economic growth over the rest of the year and worry about inflation. The Interest Rates Story To me the biggest story of markets in 2021 has been the rise of interest rates, especially at the long end of the maturity spectrum.

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Convertible Arbitrage Hedge Funds: The Perfect Combination of Investment Banking and Sales & Trading?

Brian DeChesare

Traditionally, if someone asked the “ sales & trading vs. investment banking ” question, the response was easy: “Do banking unless you really, really like trading and could not imagine doing anything else.”. Let’s say that a company issues a $5 billion convertible bond at a 0.50% coupon rate, and its share price is currently $200.

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Data Update 3: Inflation and its Ripple Effects!

Musings on Markets

That said, the three primary inflation indices in the US, the CPI, the PPI and the GDP deflator all told the same story in 2021: Download historical inflation numbers The inflation rate during the course of the year reached levels not seen in close to 40 years, with every price index registering a surge.

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In Search of a Steady State: Inflation, Interest Rates and Value

Musings on Markets

In fact, the average inflation rate in the 2011-20 decade was the lowest of the seven decades that I cover in this chart. While the market-implied expected inflation rate has also climbed to a ten-year high of 2.85%, it is clearly lower than the consumer survey expectation.