Musings on Markets
MAY 20, 2022
In a final assessment, I break down companies based upon operating cash flows (EBITDA as a percent of enterprise value) and dividend yield (dividends as a percent of market capitalization). On bond ratings, there is no discernible link between ratings and returns, until you get to the lowest rated bonds (CCC & below).
Brian DeChesare
MAY 3, 2023
Step 4: Discount the Dividends and Terminal Value to Present Value and Add Them This is like the final step of a DCF, but you use the Cost of Equity since the Dividend Discount Model is based on Equity Value, not Enterprise Value. DTM’s Levered Beta at this time was only 0.80, but I increased it to 1.00
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Valutico
OCTOBER 20, 2022
B = Beta. (Rm Discount the Terminal Value. . Add up all the figures you have to arrive at the Net Present Value. Depending on the exact methodology and discount rate used, this could be the Enterprise Value or Equity Value. Therefore, we can put in the following values: Equity. Enterprise Value.
Musings on Markets
FEBRUARY 27, 2023
Cash generating capacity : Debt payments are serviced with operating cash flows, and the more operating cash flows that firms generate, as a percent of their market value, the more that they can afford to borrow.
Musings on Markets
JANUARY 6, 2023
I also report on pricing statistics, again broken down by industry grouping, with equity (PE, Price to Book, Price to Sales) and enterprise value (EV/EBIT, EV/EBITDA, EV/Sales, EV/Invested Capital) multiples. Cost of Equity 1. PE & PEG 2. Standard deviation in stock price 2. Cost of Debt 2. Price to Book 3. Cost of Capital 3.
Musings on Markets
JULY 22, 2021
Raising or lowering the cost of capital has an effect on value, but changing my assumptions about risk premiums, betas or debt ratios has a much smaller effect that changing assumptions that alter cash flows.
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