Simply Treasury

AUGUST 2, 2022

The definition of "net equity" is as follows: equity of the company = sum of subscribed capital, share premiums, revaluation reserves, reserves and retained earnings, minus the tax value of the company's holdings in associated companies and the tax value of its own shares. Two limitations are already apparent.

Equity 52

Equity Risk Premium Banking Finance 52

Chris Mercer

MARCH 7, 2024

The purpose and definition of the valuation engagement in accordance with BVS–I General Requirements for Developing a Business Valuation, including the applicable standard (type) and premise of value. Every appraisal must have a stated purpose and definition of the valuation (i.e., the standard of value).

Dividends 52

Dividends Appraisal Terminal Value Marketability 52

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 15, 2023

Risk Free Investments: Definition, Role and Measures The place to start a discussion of risk-free rates is by answering the question of what you need for an investment to be risk-free, following up by seeing why that risk-free rate plays a central role in corporate finance and investing and then looking at the determinants of that risk-free rate.

Risk-free Rate 80

Risk-free Rate Treasury Risk Premium Start-ups 80

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

JANUARY 6, 2023

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. I do report on a few market-wide data items especially on risk premiums for both equity and debt. Debt breakdown 2.

Risk Premium 52

Risk Premium Dividends EBITDA Start-ups 52

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 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

JANUARY 27, 2021

In my last post , I described the wild ride that the price of risk took in 2020, with equity risk premiums and default spreads initially sky rocketing, as the virus led to global economic shutdowns, and then just as abruptly dropping back to pre-crisis levels over the course of the year.

Start-ups 52

Start-ups Marketability Equity Treasury 52

Musings on Markets

JULY 22, 2021

Raising or lowering the cost of capital has an effect on value, but changing my assumptions about risk premiums, betas or debt ratios has a much smaller effect that changing assumptions that alter cash flows. The Zomato IPO clocks in at 420 pages , much of it designed to bore readers into submission.

Marketability 86

Marketability Start-ups Equity Price to Book 86

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. in my July 2023 update) and apply this scalar to the default spread, to arrive at a country risk premium.

Risk Premium 52

Risk Premium Equity Start-ups Risk-free Rate 52

Musings on Markets

MARCH 28, 2022

Risk Surge and Economic Viability : In my last post, I noted the surge in Russia's default spread and country risk premium, making it one of the riskiest parts of the world to operate in, for any business. That is easier said than done, though, because as with all things ESG, those risks are in the eyes of the beholder.

Start-ups 113

Start-ups Alpha Marketability Risk Premium 113