Musings on Markets

JANUARY 30, 2023

The rise in rates transmitted to corporate bond market rates, with a concurrent rise in default spreads exacerbating the damage to investors. Thus, at least in the corporate bond market, the default spread(s) become the market price of risk or risk premium for debt markets.

Treasury 97

Treasury Start-ups Risk Premium Equity 97

Musings on Markets

JANUARY 6, 2023

Check rules of thumb : Investing and corporate finance are full of rules of thumb, many of long standing. 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. Debt breakdown 2.

Risk Premium 52

Risk Premium Dividends Start-ups EBITDA 52

Musings on Markets

JANUARY 12, 2021

Corporate Finance : Corporate finance is the development of the first financial principles that govern how to run a business. It is that mission that makes corporate finance the ultimate big picture class, one that everyone (entrepreneurs, investors, analysts, business observers) should take.

Corporate Finance 52

Corporate Finance Start-ups Finance Marketability 52

Musings on Markets

JANUARY 24, 2024

Understanding that riskfree rates vary across currencies primarily because of difference in inflation expectations is the first step to sanity in dealing with currencies in corporate finance and valuation. Corporate Borrowing As riskfree rates fluctuate, they affect the rates at which private businesses can borrow money.

Treasury 52

Treasury Risk Premium Start-ups Risk-free Rate 52

Musings on Markets

JANUARY 9, 2021

The first is that I do not have a macro focus, and my interests in macro variables occur only in the context of corporate finance or valuation issues. In the same dataset where I compute historical equity risk premiums, I report historical returns on corporate bonds in two ratings classes (Moody’s Aaa and Baa ratings).

Risk Premium 52

Risk Premium Market Capitalization Equity Start-ups 52

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 83

Equity Book Value Start-ups Corporate Finance 83

Appraiser Newsroom

JUNE 4, 2024

Gianfala is a Vice President of the Valuation Advisory group with over 15 years of experience in accounting, corporate finance, and business valuations. Nene Gianfala | ASA-BV/IA, CPA/ABV | Vice President, Shareholder | Chaffe and Associates Ms. She joined Chaffe & Associates, Inc.

Business Valuation 59

Business Valuation Intangible Assets Appraisal Finance 59

Musings on Markets

JANUARY 28, 2024

In particular, there are wide variations in how risk is measured, and once measured, across companies and countries, and those variations can lead to differences in expected returns and hurdle rates, central to both corporate finance and investing judgments.

Risk Premium 122

Risk Premium Beta Start-ups Equity 122

Musings on Markets

JANUARY 8, 2022

A few of these variables are macro variables, but only those that I find useful in corporate finance and valuation, and not easily accessible in public data bases. Rather than replicate that data, my macroeconomic datasets relate to four key variables that I use in corporate finance and valuation.

Risk Premium 99

Risk Premium Start-ups Market Capitalization Corporate Finance 99

Musings on Markets

FEBRUARY 27, 2023

An Optimizing Tool In my second and third data posts for this year, I chronicled the effects of rising interest rates and risk premiums on costs of equity and capital. In computing the latter, I used the current debt ratios for firms, but made no attempt to evaluate whether these mixes were "right" or not.

Equity 52

Equity EBITDA Start-ups Net Debt 52

Musings on Markets

MAY 11, 2021

With stocks, I compute this pre-personal tax return at the start of every month, using the current level of index and expected cash flows to back out an internal rate of return; this is the basis for the implied equity risk premium. It is one more reason that blindly using historical risk premiums can lead to static and strange values.

Dividends 52

Dividends Start-ups Risk Premium Treasury 52

Musings on Markets

JULY 24, 2024

After the 2008 market crisis, I resolved that I would be far more organized in my assessments and updating of equity risk premiums, in the United States and abroad, as I looked at the damage that can be inflicted on intrinsic value by significant shifts in risk premiums, i.e., my definition of a crisis.

Risk Premium 78

Risk Premium Equity Start-ups EBITDA 78

Reynolds Holding

MARCH 25, 2025

17] See [link] (showing the United States has among the lowest equity risk premiums in the world); Luzi Hail and Christian Leuz, International Differences in the Cost of Equity Capital: Do Legal Institutions and Securities Regulation Matter?, Division of Corporation Finance, No Action Letter: Latham and Watkins (Mar.

Corporate Finance 45

Corporate Finance Finance Banking Marketability 45

Musings on Markets

JANUARY 31, 2025

The value per share that I estimate for Nvidia dropped from $87 in September 2024 to $78 in January 2025, much of that change driven by the smaller AI chip market that comes out of the DeepSeek disruption (with the rest of the decline arising for higher riskfree rates and the equity risk premiums).

Start-ups 134

Start-ups Marketability Technology Risk Premium 134