Musings on Markets

JANUARY 28, 2024

In this post, I look at risk, a central theme in finance and investing, but one that is surprisingly misunderstood and misconstrued. I do believe that, in finance, we have significant advances in understanding what risk, I also think that as a discipline, finance has missed the mark on risk, in three ways. What is risk?

Risk Premium 93

Risk Premium Beta Start-ups Equity 93

Valutico

AUGUST 17, 2022

Valutico has once again made finance professional’s lives easier by announcing the launch of the Venture Capital (VC) method for valuing start-ups, available for the first time within its online platform. . The calculation of these discount rates are based on the observed betas of similar listed peer companies. What is the VC method?

Start-ups 52

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

Musings on Markets

FEBRUARY 27, 2023

The "Right" Financing Mix Is there an optimal mix of debt and equity for a business? One simplistic proxy for this cash generating capacity is EBITDA as a percent of enterprise value (EV), with higher (lower) values indicating greater (lesser) cash flow generating capacity. Do companies optimize financing mix?

Equity 52

Equity EBITDA Start-ups Net Debt 52

Brian DeChesare

AUGUST 10, 2022

Integrated Oil & Gas can also work, but at the large banks, you’ll mostly advise huge corporations on prospective asset deals and the occasional financing. Therefore, higher interest rates tend to make them less attractive; higher rates also make it more difficult for E&P and other firms to raise debt to finance their operations.

Banking 87

Banking EBITDA Dividends Equity 87

Musings on Markets

JANUARY 5, 2024

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. Beta & Risk 1. Financing Flows 5. EBIT & EBITDA multiple s 5. Debt Details 1.

Dividends 98

Dividends Risk Premium Equity Book Value 98

Musings on Markets

JANUARY 6, 2023

By the same token, it is impossible to use a pricing metric (PE or EV to EBITDA), without a sense of the cross sectional distribution of that metric at the time. Check rules of thumb : Investing and corporate finance are full of rules of thumb, many of long standing. EV/EBIT and EV/EBITDA 4. Cost of Equity 1. PE & PEG 2.

Risk Premium 52

Risk Premium Dividends EBITDA Start-ups 52

Musings on Markets

JANUARY 31, 2024

Your answer to that question will determine not just how you approach running the business, but also the details of how you pick investments, choose a financing mix and decide how much to return to shareholders, as dividend or buybacks. The End Game in Business If you start a business, what is your end game?

Equity 79

Equity Book Value Start-ups Corporate Finance 79