Andrew Stolz

MARCH 20, 2020

A firm uses a mix of equity and debt to minimize the cost of capital. In general, the cost of debt is lower than the cost of equity due to the tax advantage of debt. The cost of capital also reflects the riskiness of a firm which reflects the required rate of return. WACC is also viewed as appropriate for a discount rate.

Beta 52

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

Andrew Stolz

JANUARY 28, 2022

Attractive dividend yield could rise to 2x Japanese average. Attractive dividend yield could rise to 2x Japanese average. In the past share, the company has increased its dividend per share and is likely to maintain that level. This could result in a massive dividend yield of 5%+ (Japanese average is 2.5%). Conclusions.

Dividends 52

Dividends Risk-free Rate Net Debt Equity 52

Valutico

APRIL 17, 2023

WACC considers the costs associated with different components of a firm’s capital structure, such as debt, equity, and preferred stock, and weighs them according to their proportion. It is a metric used to calculate the Cost of Capital for a company based on its specific financing mix (debt, equity and/or preference shares).

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Discounted Cash Flow Beta Risk-free Rate 52

Valutico

APRIL 17, 2023

WACC considers the costs associated with different components of a firm’s capital structure, such as debt, equity, and preferred stock, and weighs them according to their proportion. It is a metric used to calculate the Cost of Capital for a company based on its specific financing mix (debt, equity and/or preference shares).

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Discounted Cash Flow Beta Risk-free Rate 52

Valutico

APRIL 12, 2023

WACC considers the costs associated with different components of a firm’s capital structure, such as debt, equity, and preferred stock, and weighs them according to their proportion. It is a metric used to calculate the Cost of Capital for a company based on its specific financing mix (debt, equity and/or preference shares).

Weighted Average Cost of Capital 52

Weighted Average Cost of Capital Discounted Cash Flow Beta Risk-free Rate 52

Musings on Markets

NOVEMBER 9, 2021

In this post , I argued that one of the key dividing lines between the two groups was flexibility , with companies with more flexible investing, financing and dividend policies winning out over companies with more rigidity on those dimensions. for mature markets.

Start-ups 99

Start-ups Dividends Marketability Market Capitalization 99

Musings on Markets

MAY 6, 2022

Investment Consequences As the storm clouds of higher inflation and interest rates, in conjunction with slower or even negative economic growth, gather, it should come as no surprise that equity markets are struggling to find their footing. At the close of trading on May 5, 2022, the S&P 500 stood at 4147, down 13.3%

Risk Premium 95

Risk Premium Treasury Start-ups Equity 95

Musings on Markets

FEBRUARY 8, 2022

Coca Cola, notwithstanding having its headquarters in Atlanta, has exposure to risk in multiple emerging markets, and its equity risk premium should reflect this exposure. Debt, Default Risk and Hurdle Rates Almost all of the discussion so far has been about equity funding and its costs, but companies do raise funds from debt.

Risk Premium 69

Risk Premium Beta Start-ups Equity 69

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.

Corporate Finance 52

Corporate Finance Start-ups Finance Marketability 52

Musings on Markets

JANUARY 19, 2022

In a post at the start of 2021 , I argued that while stocks entered the year at elevated levels, especially on historic metrics (such as PE ratios), they were priced to deliver reasonable returns, relative to very low risk free rates (with the treasury bond rate at 0.93% at the start of 2021). The year that was.

Risk Premium 82

Risk Premium Risk-free Rate Start-ups Equity 82

Musings on Markets

JANUARY 5, 2024

I have also developed a practice in the last decade of spending much of January exploring what the data tells us, and does not tell us, about the investing, financing and dividend choices that companies made during the most recent year. Beta & Risk 1. Return on Equity 1. Dividends and Potential Dividends (FCFE) 1.

Dividends 100

Dividends Risk Premium Equity Book Value 100

Musings on Markets

JANUARY 8, 2022

The consensus can be wrong : A few months ago, I made the mistake of watching Moneyheist, a show on Netflix, based upon its high audience ratings on Rotten Tomatoes , and as I wasted hours on this abysmal show, I got a reminder that crowds can be wrong, and sometimes woefully so.

Risk Premium 93

Risk Premium Start-ups Market Capitalization Corporate Finance 93

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

Musings on Markets

JANUARY 28, 2024

In my last data updates for this year, I looked first at how equity markets rebounded in 2023 , driven by a stronger-than-expected economy and inflation coming down, and then at how interest rates mirrored this rebound.

Risk Premium 95

Risk Premium Beta Start-ups Equity 95