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Navigating the Risk-Reward Equation in Mergers and Acquisitions: Unveiling the Dynamics of Financing Models

Sun Acquisitions

As organizations embark on these transformative journeys, one critical aspect that demands meticulous consideration is the financing model. The risk-reward equation in M&A financing is a delicate balance, where potential pitfalls and gains play a pivotal role in shaping the merged entity’s future.

Finance 59
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Growth Equity: The Child Prodigy of Private Equity and Venture Capital, or an Artifact of Easy Money?

Brian DeChesare

Over the past few decades, growth equity (GE) has gone from an afterthought to a major asset class for huge investment firms. Some argue that GE offers the best of both worlds: the opportunity to fund innovation and growth – as in venture capital – plus the ability to limit downside risk and invest in proven companies – as in private equity.

Equity 90
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Decentralized Finance, Crypto Funds, and Value Creation in Tokenized Firms

Reynolds Holding

Decentralized Finance (DeFi) employs blockchain technology and smart contracts with the goal of enabling perfectly disintermediated financial markets. Cumming, DeSantis Distinguished Professor of Finance and Entrepreneurship at Florida Atlantic University. This post comes to us from Paul P.

Finance 134
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Discount Rate—Explanation, Definition and Examples

Valutico

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.

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Data Update 4 for 2024: Danger and Opportunity - Bringing Risk into the Equation!

Musings on Markets

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. What is risk?

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What is the Capital Asset Pricing Model (CAPM)?

Andrew Stolz

If an investor moves money from the risk-free asset into the stock market, they should expect to earn a return in excess of the risk-free rate, what is called an equity risk premium. Investments are exposed to two types of risk: systematic and unsystematic. What Impacts the Capital Asset Pricing Model?

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Terminal Growth Rate – A Simple Explanation with Formula

Valutico

Explaining Free Cash Flow: Cash flow is like the lifeblood of a business (or your personal finances). Beyond valuations, the Terminal Growth Rate is used in various areas within the realm of finance and business decision-making. These industries often experience slower growth as they reach saturation points in the market.