Equilest
JULY 31, 2022
What is Beta in Finance, and why is it essential for a business valuation? Are you considering evaluating a business using an excel template without understanding Beta in Finance? In statistics, beta is defined as the slope of a straight line. The beta measures the return of the stock relative to the market return.
Valutico
FEBRUARY 27, 2024
The WACC represents the overall cost of financing a company’s operations and is used to discount future cash flows to their present value. It represents the cost a company incurs to access funds through debt financing. It is the cost a company incurs for using equity capital to finance its operations and growth.
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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. That said, and notwithstanding decades of research and debate on the topic, there are still wide differences in how risk is defined and measured. What is risk?
Andrew Stolz
AUGUST 5, 2020
If an investor moves money from the risk-free asset into the stock market, they should expect to earn a return in excess of the risk-free rate, what is called an equity risk premium. Investments are exposed to two types of risk: systematic and unsystematic. beta of a stock). E(r) = Rf + ??(Rm
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+
Valutico
AUGUST 10, 2023
Financial Literacy: Understanding SME valuation can empower entrepreneurs, investors, and anyone interested in finance, making the complex task of valuation more approachable. It needs to incorporate both the project risk and the opportunity cost, typically done using the CAPM method. What is the basic idea behind valuation?
Musings on Markets
FEBRUARY 8, 2022
In this post, I will start with a working definition of riskt that we can get some degree of agreement about, and then look at multiple measures of risk, both at the company and country level. In closing, I will talk about some of the more dangerous delusions that undercut good risk taking. What is risk?
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