Valutico

FEBRUARY 27, 2024

To refine the selection of the discount rate, it’s important to draw on inputs from credible sources regarding economic, industry and company specific risk factors. Capital Asset Pricing Model (CAPM): According to CAPM, the expected return on a stock has two main components: the risk-free rate and a risk premium.

Discounted Cash Flow 52

Discounted Cash Flow Risk Premium Risk-free Rate Beta 52

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. Investments are exposed to two types of risk: systematic and unsystematic. E(r) = Rf + ??(Rm

Risk-free Rate 52

Risk-free Rate Beta Weighted Average Cost of Capital Risk Premium 52

Valutico

FEBRUARY 13, 2025

It quantifies an asset’s risk relative to the market. Beta’s limitations include its reliance on historical data, potential inability to capture short-term fluctuations and company-specific risks, and sensitivity to benchmark choice. Different indices may yield different beta values for the same asset.

Beta 52

Beta Covariance Risk-free Rate Specific Risk 52

Musings on Markets

FEBRUARY 10, 2021

If you put all your money in one or the other of these companies, you are exposed to all these risks, but if you spread your bets across a dozen or more companies, you will find that company-specific risk gets averaged out. as mature markets. But what if the company is looking at a project in Nigeria or Bangladesh?

Risk-free Rate 52

Risk-free Rate Risk Premium Start-ups Equity 52

Equidam

APRIL 26, 2025

This incorporates the risk-free rate, a market risk premium specific to the company’s country, and Beta ($beta$). Beta measures the volatility of the company relative to the market. This bridges the gap between theoretical valuation principles and the specific risk profile of startups.

Discounted Cash Flow 59

Discounted Cash Flow Terminal Value Book Value Beta 59

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.

Risk Premium 64

Risk Premium Risk-free Rate Beta Market Risk 64

Equidam

APRIL 22, 2025

10] , [23] , [2] Discount Rate: The rate used to discount future cash flows is typically the cost of equity, calculated via the Capital Asset Pricing Model (CAPM): Cost of Equity = Risk-Free Rate + Beta * Market Risk Premium. [23] 23] Risk-Free Rate: Tied to government bond yields (e.g.,

Discounted Cash Flow 64

Discounted Cash Flow Terminal Value Marketability EBITDA 64