Musings on Markets

FEBRUARY 27, 2023

To fund the business, you can either use borrowed money (debt) or owner's funds (equity), and while both are sources of capital, they represent different claims on the business. Even government-owned businesses fall under its umbrella, with the key difference being that equity is provided by the taxpayers.

Equity 52

Equity EBITDA Start-ups Net Debt 52

Valutico

AUGUST 17, 2022

We’re particularly happy that this represents a significant increase in our offering for Venture Capital and Corporate Finance firms across the 70 countries Valutico is already being used in. The calculation of these discount rates are based on the observed betas of similar listed peer companies.

Start-ups 52

Start-ups EBIT Weighted Average Cost of Capital Discounted Cash Flow 52

Brian DeChesare

AUGUST 31, 2022

Convertible bonds are hybrid instruments with elements of debt and equity, and some groups that trade convertible bonds also combine elements of S&T and IB. If you’re using a strategy like long/short equity , you could long or short a company’s stock, and your results would depend heavily on the stock market’s overall direction.

Banking 64

Banking Risk-free Rate Equity Start-ups 64

Musings on Markets

FEBRUARY 8, 2022

Risk and Hurdle Rates In investing and corporate finance, we have no choice but to come up with measures of risk, flawed though they might be, that can be converted into numbers that drive decisions. In corporate finance, this takes the form of a hurdle rate , a minimum acceptable return on an investment, for it to be funded.

Risk Premium 67

Risk Premium Beta Start-ups Equity 67

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 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. Return on Equity 1. Equity Risk Premiums 2. Costs of equity & capital 4. Financing Flows 5.

Dividends 98

Dividends Risk Premium Equity Book Value 98

Brian DeChesare

AUGUST 10, 2022

Oil & Gas Investment Banking Definition: In oil & gas investment banking, professionals advise companies that search for, produce, store, transport, refine, and market energy on raising debt and equity and completing mergers and acquisitions. Midstream: 85 (mix of asset deals, M&A, debt, and even some private equity activity).

Banking 82

Banking EBITDA Dividends Equity 82

Musings on Markets

JANUARY 6, 2023

Check rules of thumb : Investing and corporate finance are full of rules of thumb, many of long standing. I do report on a few market-wide data items especially on risk premiums for both equity and debt. Cost of Equity 1. Standard deviations in equity and firm value 4. Return on Equity 1. PE & PEG 2.

Risk Premium 52

Risk Premium Dividends EBITDA Start-ups 52

Brian DeChesare

SEPTEMBER 13, 2023

Ask anyone interested in distressed debt hedge funds for “the pitch,” and they’ll probably mention one of the following: “It’s like long/short equity or credit , but more interesting!” Distressed investing offers equity-like returns with lower risk.” Distressed assets offer non-correlated returns, similar to global macro.”

Equity 83

Equity Banking EBITDA Start-ups 83

Brian DeChesare

JULY 27, 2022

Anyone who’s ever traded stocks can understand long/short equity , and even simple global macro trades are easy to explain to the average person. To simplify, we can say that credit hedge funds operate in three main areas: Long/Short Credit – It’s similar to long/short equity , but with bonds rather than stocks. See the example above.

Equity 52

Equity Start-ups Private Equity Firm Beta 52