Musings on Markets

FEBRUARY 8, 2022

The disagreements rise in how to measure this relative risk, and risk and return models in finance have tried, with varying degrees of success, to come up with this measure. I believe that a company's regression beta is an extremely noisy measure of its risk, and mistrust the betas reported on estimation services for that reason.

Risk Premium 69

Risk Premium Beta Start-ups Equity 69

Brian DeChesare

AUGUST 31, 2022

The risk-free rate is higher – because investors benefit from “delaying” their eventual purchase of the underlying shares when they earn higher interest elsewhere. The risk-free rate and time to maturity also affect the Liability component (and other factors, such as the company’s credit quality, play a role).

Banking 88

Banking Risk-free Rate Equity Start-ups 88

Musings on Markets

JANUARY 12, 2021

Thus, you and I can disagree about whether beta is a good measure of risk, but not on the principle that no matter what definition of risk you ultimately choose, riskier investments need higher hurdles than safer investments. pm (New York time) All three classes start on February 1, 2021 and end on May 10, 2021.

Corporate Finance 52

Corporate Finance Start-ups Finance Marketability 52

Musings on Markets

FEBRUARY 10, 2021

I know that many of you are not fans of modern portfolio theory or betas, but ultimately, there is no way around the requirement that you need to measure how risky a business, relative to other businesses. (More on that issue in a future data update post.) US , Europe , Emerging Markets , Japan , Australia/NZ & Canada , Global ) 2.

Risk-free Rate 52

Risk-free Rate Risk Premium Start-ups Equity 52

Musings on Markets

JULY 13, 2022

lived under full democracy, in 2021, with large differences across regions. Country Risk: Currency and Cost of Capital As a final part to this post, to see the shifts in country risk that we have seen in 2022, let’s start with an assessment of risk free rates.

Risk Premium 83

Risk Premium Risk-free Rate Start-ups Equity 83

Musings on Markets

JANUARY 5, 2024

Employee Count & Compensation I nvesting Principle Financing Principle Dividend Principle Hurdle Rate Project Returns Financing Mix Financing Type Cash Return Dividends/Buyback s 1. Beta & Risk 1. Equity Risk Premiums 2. Return on Equity 1. Debt Ratios & Fundamentals 1. Debt Details 1. Buybacks 2.

Dividends 100

Dividends Risk Premium Equity Book Value 100

Musings on Markets

JANUARY 31, 2024

In my last three posts, I looked at the macro (equity risk premiums, default spreads, risk free rates) and micro (company risk measures) that feed into the expected returns we demand on investments, and argued that these expected returns become hurdle rates for businesses, in the form of costs of equity and capital.

Equity 78

Equity Book Value Start-ups Corporate Finance 78