Musings on Markets

MAY 7, 2023

The notion of computing a cost of capital for a bank is fanciful and fruitless, and any attempt to compute an enterprise value for a bank is destined to end in failure. Note the differences between the bank FCFE and bank dividend discount models. Note the differences between the bank FCFE and bank dividend discount models.

Banking 64

Banking Price to Book Dividends Book Value 64

Andrew Stolz

MAY 8, 2020

This is a Valuation Master Class student essay by Lim Lee Bin from June 16, 2018. When used to value a declining company, analysts will face special challenges as the characteristics of a declining company will cause some of the valuation model’s assumptions to break down. 4) Big payouts – dividends and stock buyback. (5)

Discounted Cash Flow 52

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

Musings on Markets

JANUARY 9, 2021

Challenge rules of thumb and conventional wisdom : Investing has always had rules of thumb on how and when to invest, ranging from using historical PE or CAPE ratios to decide if markets are over valued, to simplistic rules (eg. buy stocks that trade at less than book value or trade at PEG ratios less than one) for individual stocks.

Risk Premium 52

Risk Premium Market Capitalization Equity Start-ups 52