Valutico

FEBRUARY 27, 2024

The discount rate effectively encapsulates the risk associated with an investment; riskier investments attract a higher discount rate. Different types of discount rates such as risk-free rate, cost of equity, or cost of debt, are used contextually in financial analysis.

Discounted Cash Flow 52

Discounted Cash Flow Risk Premium Risk-free Rate Weighted Average Cost of Capital 52

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.

Beta 40

Beta Business Valuation Finance Discounted Cash Flow 40

Andrew Stolz

AUGUST 5, 2020

It helps an investor understand what to expect to earn in relation to the risk-free rate and the market return. CAPM assumes that the minimum a rational investor would earn is the risk-free rate by buying the risk-free asset. beta of a stock). E(r) = Rf + ??(Rm

Risk-free Rate 52

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

Musings on Markets

JULY 13, 2022

I know that there are some of you, who distrust ratings agencies, arguing that they have regional and other biases and/or that they do not adjust ratings in a timely fashion. Country Risk: Equity Risk For equity investors, the price of risk is captured by the equity risk premium, and equity risk premiums will vary across countries.

Risk Premium 81

Risk Premium Risk-free Rate Start-ups Equity 81

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 93

Risk Premium Beta Start-ups Equity 93

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. Inflation rate: ß = 0.6, The risk-free rate is 5%.

Risk-free Rate 52

Risk-free Rate Risk Premium Beta Marketability 52

Musings on Markets

FEBRUARY 10, 2021

Capital Constrained Clearing Rate : The notion that any investment that earns more than what other investments of equivalent risk are delivering is a good one, but it is built on the presumption that businesses have the capital to take all good investments. More on that issue in a future data update post.)

Risk-free Rate 52

Risk-free Rate Risk Premium Start-ups Equity 52