Valutico

APRIL 17, 2023

The WACC formula derives the current cost of each form of finance, starting with the risk-free rate, the expected return on equity, and the costs associated with debt financing. The required rate of return for equity (Re) is generally calculated using the Capital Asset Pricing Model (CAPM).

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Discounted Cash Flow Beta Risk-free Rate 52

Valutico

APRIL 12, 2023

The WACC formula derives the current cost of each form of finance, starting with the risk-free rate, the expected return on equity, and the costs associated with debt financing. The required rate of return for equity (Re) is generally calculated using the Capital Asset Pricing Model (CAPM).

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Discounted Cash Flow Beta Risk-free Rate 52

Brian DeChesare

AUGUST 31, 2022

To explain the mechanics of this trade, we need to start with some background information about convertible bonds: What Are Convertible Bonds, and Why Do Companies Issue Them? 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 67

Banking Risk-free Rate Equity Start-ups 67

Musings on Markets

MARCH 25, 2021

for the year are at war with its concurrent promise to keep rates low; after all, adding those numbers up yields a intrinsic risk free rate of 8.7%. The Stocks Story As treasury rates have risen in 2021, equity markets have been surprisingly resilient, with stocks up during the first three months.

Equity 52

Equity Risk-free Rate Treasury Start-ups 52

Andrew Stolz

JANUARY 28, 2022

Historically, Japan has a very low risk-free rate. DISCLAIMER: This content is for information purposes only. While the information provided is believed to be accurate, it may include errors or inaccuracies. However, my long-term outlook is a bit more optimistic. Download the full report as a PDF.

Dividends 52

Dividends Risk-free Rate Net Debt Equity 52

Andrew Stolz

JANUARY 28, 2022

Russia has a massively high risk-free rate of 10%. DISCLAIMER: This content is for information purposes only. While the information provided is believed to be accurate, it may include errors or inaccuracies. FCFF likely to remain volatile given abrupt changes in working capital. Value estimate – Gazprom.

Risk-free Rate 52

Risk-free Rate Net Debt Start-ups Marketability 52

Musings on Markets

JANUARY 24, 2024

Other Currencies The rise in interest rates that I chronicled for the United States played out in other currencies, as well. Note also that during 2022 and 2023, the movements in these government bond rates mimic the US treasuries, rising strongly in 2022 and declining or staying stable in 2023.

Treasury 52

Treasury Risk Premium Start-ups Risk-free Rate 52

Musings on Markets

JANUARY 8, 2022

In the last decade, as tech companies have expanded their reach into our personal lives, collecting information on choices and decisions that used to private, big data has become not just a buzzword, but also a justification for investing billions in companies/projects that have no discernible pathway to profitability, but offer access to data.

Risk Premium 91

Risk Premium Start-ups Market Capitalization Corporate Finance 91

ThomsonReuters

JUNE 15, 2021

Additionally, private companies have options in a few areas—most notably use of IBR or risk-free rate–that public companies do not,” she said. Topic 280, Segment Reportin g , is a topic target private companies have to mindful of because the rules are unique to public companies.

Risk-free Rate 64

Risk-free Rate Equity Start-ups Book Value 64

Brian DeChesare

MAY 3, 2023

Dividend Discount Model, Part 4: Present Value of Terminal Value and Dividends Since the Dividend Discount Model is based on Equity Value, not Enterprise Value, the Discount Rate is the Cost of Equity: Risk-Free Rate + Equity Risk Premium * Levered Beta.

Dividends 64

Dividends Terminal Value Enterprise Value Equity 64

Musings on Markets

JANUARY 28, 2024

That is understandable, but digger deeper into the data and doing more analysis will lead to better estimates, only if the risk that you are looking at is estimation risk.

Risk Premium 93

Risk Premium Beta Start-ups Equity 93

ThomsonReuters

MAY 6, 2021

The discount rate. Collecting the information necessary to establish proper assumptions can be a lot of work, so management must ensure it puts aside adequate time and resources for this exercise. The Codification often provides guidance on how to select a discount rate for a particular area of accounting.

Discounted Cash Flow 52

Discounted Cash Flow Risk-free Rate Risk Premium Intangible Assets 52

Musings on Markets

JULY 27, 2022

The effects of inflation show up first as higher risk free rates , across currencies, and next in higher risk premiums, with both equity risk premiums and default spreads rising. An Action Plan So, what now?

Risk Premium 81

Risk Premium Start-ups Equity Marketability 81

Musings on Markets

JANUARY 12, 2021

In this class, I try (and that is all I can do) to provide a full menu of investment philosophies, starting with technical analysis/charting, moving on to value and growth investing (in both public and private forms), and then on trading on public or private information.

Corporate Finance 52

Corporate Finance Start-ups Finance Marketability 52

Musings on Markets

JANUARY 5, 2024

The numbers that I computed opened my eyes to how much perspective on the high, low, and typical values, i.e., the distribution of margins, helped in valuing the company, and how little information there was available, at least at that time, on this dimension. will reflect the most recent quarterly accounting filing.

Dividends 98

Dividends Risk Premium Equity Book Value 98

Appraisal Rights

AUGUST 8, 2017

The Court found that market prices may generally be superior to other valuation techniques where they reflect the collective judgment of many persons who were incorporating publicly available information, as opposed to a single person’s performing his own valuation model, such as a discounted cash flow analysis.

Discounted Cash Flow 40

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

Brian DeChesare

FEBRUARY 28, 2024

Rates: Is the “risk-free rate” truly risk-free ? Rate Changes: If interest rates are set to rise over the next year, how would you structure your portfolio? What might cause a bond’s price to change? Bond Math: How can you approximate the Yield to Maturity? What does duration mean intuitively?

Equity 59

Equity Banking Start-ups Finance 59

Valutico

OCTOBER 20, 2022

Rf = Risk-free Rate. Rm – Rf) = Equity Market Risk Premium. Value a company’s stock price to compare it to the actual stock price, as one piece of information to help you decide whether to invest. Now, we need to calculate the discount rate. . Risk free rate (can use 10y Treasury).

Discounted Cash Flow 52

Discounted Cash Flow Terminal Value Weighted Average Cost of Capital Net Present Value 52