Andrew Stolz

AUGUST 6, 2020

The return on assets is determined by systematic factors such as changes in inflation , risk premiums, interest rates, etc. Investors construct portfolios with unsystematic risks, which are well-diversified to reduce total portfolio risk. With the given information, calculate the expected return using APT.

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Risk-free Rate Risk Premium Beta Marketability 52

Equilest

JANUARY 3, 2023

In this blog post, we will explore the key principles of the APT and provide a comprehensive guide on how to use it to make informed investment decisions. Arbitrage Pricing Theory (APT) is a financial model that describes how the price of an asset is determined by a number of factors or "risk factors." x 5%) + (0.2 x 4%) + (0.1

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Risk Premium Risk-free Rate Market Risk Finance 40

ThomsonReuters

APRIL 7, 2021

When submitting financials as part of your loan package, consider accompanying them with voluntary disclosures similar to the ones that public companies provide about non-GAAP financial measures, and in the MD&A and risk factor sections of their SEC filings.

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Risk Premium Business Valuation Equity 71

Musings on Markets

JANUARY 24, 2024

In my last data update, I measured the price of risk in the equity market in the form on an implied equity risk premium, and chronicled how it rose sharply in 2022 and dropped in 2023, paralleling the movements in default spreads.

Treasury 52

Treasury Risk Premium Start-ups Risk-free Rate 52

Musings on Markets

JANUARY 6, 2023

To obtain company-level information, you needed to find its annual reports in physical form and for industry-level data, you were dependent on services that computed and reported industry averages, such as Value Line and S&P. I do report on a few market-wide data items especially on risk premiums for both equity and debt.

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Risk Premium Dividends Start-ups EBITDA 52

Equidam

APRIL 26, 2025

a 409A valuation in the US), planning exit strategies, and informing overall business planning. High failure rates are a stark reality in the startup world, adding another layer of risk that must be accounted for. This incorporates the risk-free rate, a market risk premium specific to the company’s country, and Beta ($beta$).

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Discounted Cash Flow Terminal Value Book Value Beta 59

Musings on Markets

JANUARY 9, 2021

The other is that even in those parts of the world, where private company information is available, the data is limited and market price data is missing (since the companies are not traded). It is true that the Turkish company will face more risk because of its location, but that is an issue separate from currency.

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Risk Premium Market Capitalization Equity Start-ups 52

Equilest

APRIL 11, 2023

With limited features and formulas, it can be difficult to account for all the necessary parameters in a valuation, such as interest rates, equity risk premiums, and beta. It does not have an API to import data from accounting software, which makes it difficult to get accurate financial information for the business being valued.

Business Valuation 40

Business Valuation Beta Risk Premium Discounted Cash Flow 40

Valutico

DECEMBER 12, 2023

Efficient and comprehensive searches are fundamental to informed decision-making. We’ve added a ‘date picker’ across key resources sections, allowing you to examine risk-free rates, corporate tax rates, market risk premium, and country ratings across any historic date you select. Why Important?

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Risk-free Rate Risk Premium Market Risk Marketability 52

Valutico

AUGUST 10, 2023

Ultimately, valuing an SME demands a comprehensive approach that balances quantitative data with qualitative insights to arrive at an informed and defensible estimation of its worth. These challenges primarily lie in the following areas: Information availability: SMEs often lack historical financial information.

Discounted Cash Flow 52

Discounted Cash Flow Asset-based Approach Intangible Assets Business Valuation 52

Valutico

SEPTEMBER 13, 2023

It determines the economic worth of a company and is essential for informed decision-making. SMEs can present challenges with DCF due to limited historical financial data, unreliable information, inadequate financial forecasts, and difficulty in determining terminal value. The discount rate is another contentious area.

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Discounted Cash Flow Comparable Company Analysis Asset-based Approach Intangible Assets 52

Equilest

APRIL 12, 2023

This includes your financial statements, tax returns, and any other relevant financial data, as well as information about your business operations, such as the number of employees and the types of services you offer. With this information, you can make informed decisions about the future of your business.

Business Valuation 40

Business Valuation Beta Risk Premium Marketability 40

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. risk premium if the company is an SME as defined by European law).

Equity 52

Equity Risk Premium Banking Finance 52

Equilest

JULY 10, 2023

Whether you are a potential investor, a business owner, or a financial professional, accurately assessing the value of a company operating in this industry is crucial for making informed decisions. Assessing and quantifying these risks helps determine an appropriate discount rate or risk premium when calculating the company's value.

Business Valuation 40

Business Valuation Asset-based Approach Risk Premium Price to Earnings 40

Equilest

JULY 10, 2023

Whether you are a potential investor, a business owner, or a financial professional, accurately assessing the value of a real estate operating company is crucial for making informed decisions. Assessing and quantifying these risks helps determine an appropriate discount rate or risk premium when calculating the company's value.

Business Valuation 40

Business Valuation Asset-based Approach Risk Premium Price to Earnings 40

Equilest

JULY 10, 2023

A comprehensive guide on valuing a business in the real estate development industry, including key factors, valuation methods, and risk considerations In the fast-paced world of real estate development, accurately valuing a business is crucial for making informed decisions and maximizing returns on investment.

Business Valuation 40

Business Valuation Risk Premium Marketability Finance 40

Valutico

FEBRUARY 13, 2025

In the world of finance and investing, the concept of beta plays a vital role in assessing an investment’s risk and volatility. Whether you’re a seasoned investor or new to the market, understanding beta can empower you to make informed decisions. For example, a beta of 1.5 suggests dampened price movements, around 0.8%

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Musings on Markets

JULY 22, 2021

Since Zomato owns 100% of most of these subsidiaries, there may be legal or tax reasons for this structure, but there is no denying that it adds complexity (and pages) to the prospectus, with no real information benefits. The reason that they are wrong is simple.

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Marketability Start-ups Equity Price to Book 99

Chris Mercer

MARCH 7, 2024

Access to, availability of, and reliability of information regarding the underlying asset or entity. Access to reliable information is certainly an important factor since investors desire to know the factual backgrounds of their investments. Appraisers sometimes think that it is not possible to estimate holding period premiums.

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Dividends Appraisal Terminal Value Business Valuation 52

Appraiser Newsroom

MAY 1, 2024

Insurance industry terminology such as risk, premium, loss, deductibles, coverage limits, and perils are some of the fundamental concepts appraisers must grasp. Different property insurance policies have unique features and limitations.

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Appraisal Risk Premium Marketability 40

Equilest

JUNE 13, 2023

Make informed decisions and maximize your investment returns In the aftermath of a disaster, restoration businesses play a vital role in helping affected individuals and communities recover. For potential buyers, understanding the true value of the business ensures they make informed investment decisions and avoid overpaying.

Business Valuation 40

Business Valuation Asset-based Approach Appraisal Intangible Assets 40

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. DTM’s Levered Beta at this time was only 0.80, but I increased it to 1.00

Dividends 64

Dividends Terminal Value Enterprise Value Equity 64

Equilest

JUNE 10, 2023

Data entry tasks, especially when dealing with large volumes of information, can be time-consuming and prone to errors. Factors such as multiples, beta, and equity risk premium are required for accurate calculations. Reassessing the value helps you stay informed about the worth of your business in the current market.

Business Valuation 40

Business Valuation Fair Market Value Marketability Technology 40

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.

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Corporate Finance Start-ups Finance Marketability 52

Valutico

OCTOBER 20, 2022

Rf = Risk-free Rate. Rm – Rf) = Equity Market Risk Premium. Cp = Cost of Equity 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. Ce = Cost of Equity. B = Beta. (Rm Value a project.

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

Musings on Markets

JANUARY 19, 2022

The Price of Risk in Equity Markets The allure of having the historical data that we do in financial markets, especially in the United States, is that there is information in the past. In 2021, you saw a return to more normal times, with markets in each country affected more by local factors.

Risk Premium 99

Risk Premium Risk-free Rate Start-ups Equity 99

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. If you are interested, you can review the process that I use in far more detail in this paper that I update every year on country risk.

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Risk Premium Beta Start-ups Equity 121

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. As a company with the bulk of its business in India, Zomato again is more exposed to these developments. 2% from my IPO valuation.

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Risk Premium Start-ups Equity Marketability 98

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 99

Risk Premium Start-ups Market Capitalization Corporate Finance 99

Musings on Markets

FEBRUARY 16, 2024

In another story that made the rounds in recent weeks, 23andMe, a genetics testing company that offers its customers genetic and health information, based upon saliva sample, found itself facing the brink, after a hacker claimed to have hacked the site and accessed the genetic information of millions of its customers.

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Risk Premium Start-ups Beta Marketability 78

Musings on Markets

MARCH 25, 2021

Risk premiums No effect or even a decrease. Risk premia may rise as inflation increases, because higher inflation is almost always more volatile than low inflation. Download data While the chart itself has too much noise to draw conclusions, the correlations that I have calculated provide more information.

Equity 52

Equity Risk-free Rate Treasury Start-ups 52

Musings on Markets

JULY 24, 2024

After the 2008 market crisis, I resolved that I would be far more organized in my assessments and updating of equity risk premiums, in the United States and abroad, as I looked at the damage that can be inflicted on intrinsic value by significant shifts in risk premiums, i.e., my definition of a crisis.

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Risk Premium Equity Start-ups EBITDA 77

Musings on Markets

JANUARY 17, 2025

Computing the returns in real terms , by taking out inflation in each year from that year's returns, and recomputing the equity risk premiums: Download historical data Note that the equity risk premiums move only slightly, because inflation finds its way into both stock and treasury returns.

Equity 129

Equity Risk Premium Treasury Start-ups 129

Equidam

MAY 14, 2025

This calibration directly impacts expected returns, required ROI, survival rates, and appropriate liquidity discounts, significantly refining risk assessment. Country: Argentina Operating from Argentina influences extrinsic risk factors due to regional economic conditions, market size, regulatory environment, and currency stability.

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Risk Premium Risk-free Rate Beta Market Risk 64

Musings on Markets

MAY 3, 2025

Risk and Co-movement Early in April, I argued that the one number that would track the balance between greed and fear in markets would be the price of risk in markets, and I resolved to estimate that price every day, through April, for both equity and bond markets.

Marketability 95

Marketability Start-ups Treasury Risk Premium 95

Musings on Markets

JANUARY 28, 2025

Last year, as the treasury bond rate rose from 3.88% to 4.58%, it should come as no surprise that corporate bond rates rose as well, but there is information in the rate differences between the two markets. Data Links Intrinsic risk free rates and Nominal interest rates Bond Default Spreads and Equity Risk Premiums

Banking 70

Banking Treasury Risk Premium Start-ups 70

Musings on Markets

JANUARY 31, 2025

The value per share that I estimate for Nvidia dropped from $87 in September 2024 to $78 in January 2025, much of that change driven by the smaller AI chip market that comes out of the DeepSeek disruption (with the rest of the decline arising for higher riskfree rates and the equity risk premiums).

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Start-ups Marketability Technology Risk Premium 134