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Data Update 3: Inflation and its Ripple Effects!

Musings on Markets

Not only has the intrinsic risk free rate moved in sync with the ten-year bond rate for most of the last seven decades, but you can also see that the main reason why rates have been low for the last decade is not the Fed, with all of its quantitative easing machinations, but a combination of low growth and low inflation.

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Use of Discounted Cash Flow Approaches in US GAAP Accounting

ThomsonReuters

The Codification often provides guidance on how to select a discount rate for a particular area of accounting. The Codification may require the use of a risk-free rate in some places and a risk-adjusted rate in others. Recent events have also impacted the components of the discount rate.

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Data Update 2 for 2021: The Price of Risk!

Musings on Markets

If, on the other hand, investors are risk neutral, the price of risk will be zero, and investors will buy risky business, stocks and other investments, and settle for the risk free rate as the expected return. It is only fair that I go first.

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Arbitrage Pricing Theory (APT) - Can it Enhance Valuation?

Equilest

In this blog post, we will explore the key principles of the APT and provide a comprehensive guide on how to use it to make informed investment decisions. Next, we need to estimate the risk-free rate and the risk premium for each risk factor. x 5%) + (0.2 x 4%) + (0.1

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Top 5 Accounting Issues to Master to Avoid Snags in SPAC IPOs

ThomsonReuters

Additionally, private companies have options in a few areas—most notably use of IBR or risk-free rate–that public companies do not,” she said. The post Top 5 Accounting Issues to Master to Avoid Snags in SPAC IPOs appeared first on Tax & Accounting Blog Posts by Thomson Reuters.

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In Search of a Steady State: Inflation, Interest Rates and Value

Musings on Markets

Inflation: The Full Story I wrote my first post on this blog in 2008, and inflation merited barely a mention until 2020, though it is an integral component of investing and valuation.

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Tesla in 2023: A Return to Reality, The Start of the End or Time to Buy?

Musings on Markets

I don't own a Tesla, and have only driven someone else's Tesla, but as readers of this blog know, I valued Tesla for the first time in 2014, and I keep returning to the scene of the crime. I drive a 2010 Honda Civic, a perfectly serviceable vehicle that is never going to get oohs and ahas from onlookers, but I feel no urge to value Honda.