Musings on Markets

JANUARY 21, 2023

trillion on their market capitalization at the end of 2019. Historical Equity Risk Premium The conventional wisdom, at least as taught in business schools and practiced by appraisers, is that the only practice way to estimate equity risk premiums for the future is to use equity risk premiums earned in the past.

Equity 96

Equity Risk Premium Start-ups Dividends 96

ThomsonReuters

MAY 6, 2021

The Codification often provides guidance on how to select a discount rate for a particular area of accounting. The Codification may require the use of a risk-free rate in some places and a risk-adjusted rate in others. The risk premium may incorporate factors such as credit risk or market illiquidity.

Discounted Cash Flow 52

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

Musings on Markets

MAY 6, 2022

Note that in all three cases, it is not the Fed that is driving rates, but what is happening to inflation. As the inflation bogeyman returns, the worries of what may need to happen to the economy to bring inflation back under control have also mounted.

Risk Premium 102

Risk Premium Treasury Start-ups Equity 102

Musings on Markets

JANUARY 5, 2024

Thus, I have treated leases as debt in computing debt ratios all through the decades that I have been computing this statistic, even though accounting rules did not do so until 2019, and capitalized R&D, even though accounting has not made that judgment yet. Beta & Risk 1. Equity Risk Premiums 2. Tax rates 4.

Dividends 105

Dividends Risk Premium Equity Book Value 105

Andrew Stolz

MARCH 20, 2020

This is a Valuation Master Class student essay by Teeradon Piyakiattisuk from March 19, 2019. The formula implies the return an investor expects from a risk-free investment plus the return from the stock in relation to market volatility. The market risk premium is calculated from a market rate of return less a risk-free rate.

Beta 52

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

Musings on Markets

NOVEMBER 9, 2021

My two most recent valuations were in June 2019 and January 2020, and I am going to go back to them, not just because they are recent, but because they led to investment decisions on my part. In June 2019, Tesla had hit a rough spot, partly due to concerns about production bottlenecks and debt, and partly due to self inflicted wounds.

Start-ups 101

Start-ups Dividends Marketability Market Capitalization 101

Musings on Markets

JANUARY 26, 2023

Just as impressively, the company finally started delivering on its promise of profitability, going from barely making money in 2019 to an operating margin of 16.57% in 2022. billion, a remarkable achievement by itself, but COVID gave the company a boost, as revenue have increased about 250% in the 2020-22 time-period.

Start-ups 99

Start-ups Marketability Risk Premium Equity 99