Equidam

APRIL 26, 2025

For startups, particularly in technology and software sectors, the primary assets are often intangible intellectual property, skilled teams, user bases, brand equity, and growth potential. Free cash flow to equity (FCFE) is typically used, representing cash available to equity holders after all expenses, investments, and debt payments.

Discounted Cash Flow 59

Discounted Cash Flow Terminal Value Book Value Beta 59

Musings on Markets

JANUARY 5, 2024

Beta & Risk 1. Return on Equity 1. Equity Risk Premiums 2. Costs of equity & capital 4. Costs of equity & capital 4. Valuation Pricing Growth & Reinvestment Profitability Risk Multiple s 1. Valuation Pricing Growth & Reinvestment Profitability Risk Multiple s 1.

Dividends 106

Dividends Risk Premium Equity Book Value 106

Andrew Stolz

MARCH 20, 2020

A firm uses a mix of equity and debt to minimize the cost of capital. In general, the cost of debt is lower than the cost of equity due to the tax advantage of debt. The cost of equity (Ke) is an expected return that a firm pays to an equity investor to compensate for the risk of investing capital.

Beta 52

Beta Capital Structure Risk-free Rate Weighted Average Cost of Capital 52

Andrew Stolz

AUGUST 6, 2020

The return on assets is determined by systematic factors such as changes in inflation , risk premiums, interest rates, etc. Investors construct portfolios with unsystematic risks, which are well-diversified to reduce total portfolio risk. In theory, arbitrage provides investors with a high chance of success. 1 + RP1 + ??2+

Risk-free Rate 52

Risk-free Rate Risk Premium Beta Marketability 52

Musings on Markets

FEBRUARY 10, 2021

Cost of raising funds (capital) : Since the funds that are invested by a business come from equity investors and lenders, one way in which the hurdle rate is computed is by looking at how much it costs the investing company to raise those funds. More on that issue in a future data update post.) as mature markets.

Risk-free Rate 52

Risk-free Rate Risk Premium Start-ups Equity 52

Appraisal Rights

JUNE 5, 2017

In selecting the appropriate equity risk premium, the court observed that whether to use supply-side or historical ERP should be determined on a case-by-case basis. With regard to beta, the court found fault with both side’s approach.

Beta 40

Beta Risk Premium Capital Structure Discounted Cash Flow 40

Brian DeChesare

MAY 3, 2023

And it values the company today based on the present value of its dividends and that potential future value (either the stock price or the Equity Value via the Terminal Value calculation). And Equity Real Estate Investment Trusts (REITs) must distribute almost all their Net Income, so the DDM can work well in REIT valuations.

Dividends 64

Dividends Terminal Value Enterprise Value Equity 64

Equilest

APRIL 11, 2023

With limited features and formulas, it can be difficult to account for all the necessary parameters in a valuation, such as interest rates, equity risk premiums, and beta. It lacks interest rates, equity risk premiums, beta, and other important data.

Business Valuation 40

Business Valuation Beta Risk Premium Discounted Cash Flow 40

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 6, 2023

When valuing or analyzing a company, I find myself looking for and using macro data (risk premiums, default spreads, tax rates) and industry-level data on profitability, risk and leverage. I do report on a few market-wide data items especially on risk premiums for both equity and debt. Cost of Equity 1.

Risk Premium 52

Risk Premium Dividends Start-ups EBITDA 52

Valutico

OCTOBER 20, 2022

Ce = Cost of Equity. Rf = Risk-free Rate. B = Beta. (Rm Rm – Rf) = Equity Market Risk Premium. Cp = Cost of Equity Premium. Ce = Cost of Equity. E = Equity . Depending on the exact methodology and discount rate used, this could be the Enterprise Value or Equity Value.

Discounted Cash Flow 52

Discounted Cash Flow Terminal Value Weighted Average Cost of Capital Net Present Value 52

Musings on Markets

JULY 22, 2021

Uber's ownership in Zomato is a result of Zomato's acquisition of Uber Eats India, where Uber received a share of Zomato's equity in exchange. As revenues have grown, the business model for the company has been slower to evolve, as the company has reported extensive losses along the way, as you will see in the next section.

Marketability 99

Marketability Start-ups Equity Price to Book 99

Musings on Markets

JANUARY 12, 2021

Thus, you and I can disagree about whether beta is a good measure of risk, but not on the principle that no matter what definition of risk you ultimately choose, riskier investments need higher hurdles than safer investments.

Corporate Finance 52

Corporate Finance Start-ups Finance Marketability 52

Equilest

JUNE 10, 2023

Factors such as multiples, beta, and equity risk premium are required for accurate calculations. Determining which method to use depends on factors such as the business's size, growth potential, industry conditions, and available data.

Business Valuation 40

Business Valuation Fair Market Value Marketability Technology 40

Equilest

JUNE 13, 2023

Factors such as multiples, beta, and equity risk premium are required for accurate calculations. Determining which method to use depends on factors such as the business's size, growth potential, industry conditions, and available data.

Business Valuation 40

Business Valuation Asset-based Approach Appraisal Intangible Assets 40

Appraiser Newsroom

JUNE 4, 2024

He is member of the Beta Gamma Sigma Honor Society, Financial Executives International, and the National Association of Corporate Directors (NACD). Dr. Everett also has an M&A Advisory and business valuation practice. Michael is part of the industrial products industry group of the firm and co-head of U.S. Tax Valuation Services.

Business Valuation 59

Business Valuation Intangible Assets Appraisal Finance 59

Musings on Markets

JANUARY 28, 2024

In my last data updates for this year, I looked first at how equity markets rebounded in 2023 , driven by a stronger-than-expected economy and inflation coming down, and then at how interest rates mirrored this rebound.

Risk Premium 121

Risk Premium Beta Start-ups Equity 121

Musings on Markets

FEBRUARY 16, 2024

Minuses : As in the last approach, you still have to estimate a probability that a catastrophe will occur, and in addition, and there can be challenges in estimating the value of a business, if the company fails in the face of catastrophic risk. 4 & 5 Uninsurable Risk. Note that these higher discount rates apply in both scenarios.

Risk Premium 78

Risk Premium Start-ups Beta Marketability 78

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

Equidam

APRIL 22, 2025

It determines the price per share, dictating how much equity founders concede in exchange for the capital raised. [3] 3] , [7] , [6] It sets a benchmark against which future fundraising rounds will be measured and helps investors assess whether the potential upside justifies the significant risks associated with early-stage ventures. [8]

Discounted Cash Flow 64

Discounted Cash Flow Terminal Value Marketability EBITDA 64