Equilest

MARCH 17, 2022

We note that the higher the expected rate (in other words, the greater the risk is perceived as necessary, to the point of requiring a substantial "risk premium"), the lower the multiple that will apply and therefore the lower valuation: we buy cheaper which is less safe. Net Operating Surplus Multiples (ENE or EBIT).

Business Valuation 40

Business Valuation EBIT Discounted Cash Flow EBITDA 40

Musings on Markets

JANUARY 10, 2025

Thus, as you peruse my historical data on implied equity risk premiums or PE ratios for the S&P 500 over time, you may be tempted to compute averages and use them in your investment strategies, or use my industry averages for debt ratios and pricing multiples as the target for every company in the peer group, but you should hold back.

Risk Premium 115

Risk Premium Dividends Start-ups Corporate Finance 115

Musings on Markets

FEBRUARY 23, 2025

The table below computes debt to capital ratios, in book and market terms, by sector and sub-region: I would begin by separating the financial sector from the rest of the market, since debt to banks is raw material, not a source of capital. Data Update 4 for 2025: Interest Rates, Inflation and Central Banks!

Equity 75

Equity EBITDA Risk Premium Gross Debt 75