Musings on Markets

FEBRUARY 27, 2023

In fact, as you can see from the cost of capital graph, there is little, if any, benefit in terms of value added to Adani from using debt, and significant downside risk, unless the debt is being subsidized by someone (government, sloppy bankers, green bondholders).

Equity 52

Equity EBITDA Start-ups Net Debt 52

Musings on Markets

JANUARY 31, 2024

While private businesses are often described as profit maximizers, the truth is that if they should be value maximizers. Thus, a company with growth potential may be willing to generate less in profits now, or even make losses, to advance its growth prospects.

Equity 79

Equity Book Value Start-ups Corporate Finance 79

Musings on Markets

JANUARY 5, 2024

In my corporate finance class, I describe all decisions that companies make as falling into one of three buckets – investing decisions, financing decision and dividend decisions. Beta & Risk 1. Financing Flows 5. Standard Deviation in Equity/Firm Value 2. Book Value Multiples 3. Buybacks 2.

Dividends 98

Dividends Risk Premium Equity Book Value 98

Musings on Markets

JANUARY 6, 2023

Check rules of thumb : Investing and corporate finance are full of rules of thumb, many of long standing. For example, I have seen it asserted that a stock that trades at less than book value is cheap or that a stock that trades at more than twenty times EBITDA is expensive. Price to Book 3. Cost of Equity 1.

Risk Premium 52

Risk Premium Dividends EBITDA Start-ups 52

Brian DeChesare

SEPTEMBER 13, 2023

The company still pays interest on the full $1000 and must repay it upon maturity, but you can buy the issuance at a steep discount because there’s a significant chance of default (see: book value vs. market value vs. face value ). A sharply declining stock price does not necessarily mean a company is “distressed.”

Equity 83

Equity Banking EBITDA Start-ups 83