Musings on Markets

FEBRUARY 10, 2021

What is a hurdle rate for a business? There are multiple definitions that you will see offered, from it being the cost of raising capital for that business to an opportunity cost , i.e., a return that you can make investing elsewhere, to a required return for investors in that business.

Risk-free Rate 52

Risk-free Rate Risk Premium Start-ups Equity 52

Brian DeChesare

AUGUST 31, 2022

But before delving into the best candidates for these roles, typical trades, careers, and more, let’s start with the basic definitions: What is a Convertible Arbitrage Hedge Fund? The risk-free rate is higher – because investors benefit from “delaying” their eventual purchase of the underlying shares when they earn higher interest elsewhere.

Banking 64

Banking Risk-free Rate Equity Start-ups 64

Musings on Markets

JANUARY 12, 2021

If it looks like I am over reaching, I start my corporate finance class with the simple proposition that any decision that involves money is a corporate finance decision, and by that definition everything that businesses do falls under its umbrella. The links to all of these classes are at the end of this post.

Corporate Finance 52

Corporate Finance Start-ups Finance Marketability 52

Musings on Markets

AUGUST 5, 2023

ERP: Definition and Determinants The place to start this discussion is with an explanation of what an equity risk premium is, the determinants of that number and why it matters for investors. The risk premium that you demand has different names in different markets.

Risk Premium 78

Risk Premium Equity Start-ups Treasury 78

Appraisal Rights

AUGUST 8, 2017

That definition required a valuation of the petitioners’ shares based on the “going concern” value of the stock, and that notion also disregarded any minority discount that would inhere in a stock-market price. to that figure assumed, without accompanying record support, that another period of robust, above-market growth was on the way.

Discounted Cash Flow 40

Discounted Cash Flow Comparable Company Analysis Risk-free Rate Appraisal 40

Brian DeChesare

FEBRUARY 28, 2024

Fixed Income Research Definition: In fixed income research, finance professionals analyze companies’ debt issuances and make pricing and investment recommendations based on their outlook for each one. Rates: Is the “risk-free rate” truly risk-free ? What might cause a bond’s price to change?

Equity 59

Equity Banking Start-ups Finance 59

Musings on Markets

FEBRUARY 8, 2022

Investors all talk about risk, but there seems to be little consensus on what it is, how it should be measured, and how it plays out in the short and long term. In closing, I will talk about some of the more dangerous delusions that undercut good risk taking.

Risk Premium 67

Risk Premium Beta Start-ups Equity 67

Musings on Markets

MAY 24, 2021

Implicit in this definition are two key components of inflation. The first is that to define purchasing power, you have to start with a definition of what you are purchasing, and this detail, as we will see, can lead to differences in inflation measured over a given period, across measures/services.

Treasury 55

Treasury Start-ups Risk Premium Price to Book 55

Musings on Markets

JULY 25, 2023

The second is that what comprises default in the sovereign CDS market may not coincide with investor definitions of default , though there are approaches that can be used to back out the likelihood of default from a CDS value.

Risk Premium 52

Risk Premium Equity Start-ups Risk-free Rate 52