Equity Risk Premium Specific Risk 
Valutico
FEBRUARY 27, 2024
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.
Andrew Stolz
AUGUST 5, 2020
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. Unsystematic risks are risks specific to a particular stock, which is why they are also called, company-specific risk.
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Musings on Markets
FEBRUARY 10, 2021
Cost of raising funds (capital) : Since the funds that are invested by a business come from equity investors and lenders, one way in which the hurdle rate is computed is by looking at how much it costs the investing company to raise those funds. But what if the company is looking at a project in Nigeria or Bangladesh? as mature markets.
Equidam
APRIL 26, 2025
For startups, particularly in technology and software sectors, the primary assets are often intangible intellectual property, skilled teams, user bases, brand equity, and growth potential. Free cash flow to equity (FCFE) is typically used, representing cash available to equity holders after all expenses, investments, and debt payments.
Chris Mercer
MARCH 7, 2024
The emerging attractiveness of the entity for equity offering, sale, merger or acquisition. The risk of involuntary dilution when no preemptive rights are provided in the articles of incorporation or bylaws of a corporation. This holding period premium is the same holding period premium demanded by investors in restricted stocks.
Equidam
JUNE 30, 2025
The end of the ZIRP (Zero Interest Rate Policy) era has created a valuation reset that’s forcing founders into down rounds, threatening equity dilution, employee morale, and future fundraising ability. If you’re a founder facing this reality, you’re not alone, and more importantly, you’re not doomed.
Appraiser Newsroom
JUNE 4, 2024
He is a frequent presenter on valuation topics, and is currently a subject matter expert on the Appraisal Foundation’s working group preparing a Valuation Advisory on the Company-Specific Risk Premium. Michael is part of the industrial products industry group of the firm and co-head of U.S. Tax Valuation Services.
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