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In my last post , I discussed how inflation's return has changed the calculus for investors, looking at how inflation affects returns on different asset classes, and tracing out the consequences for equityvalues, in the aggregate. The distinction that I made between expected and unexpected inflation comes into play in this table.
In this post, I will begin by looking at how to value banks and follow up with an examination of investor views of banking have changed, by looking at pricing, before examining divergences in how banks are priced in the market today. All Equity, All the time!
This evaluation is pivotal because it dictates the terms of investment, directly influencing how much equity (ownership) a founder must relinquish in exchange for funding from the Sharks. Conversely, a lower valuation may require founders to give up more equity.
Understanding the Concept: In essence, FCFF encapsulates the cash that can be distributed to both debt and equity holders after meeting operational needs and capital expenditures. The resulting value represents the cash available to all contributors of capital—both debt and equity. What is Free Cash Flow to Equity?
Analysts use financial metrics and multiples such as Price to Earnings (P/E), Price to Book (P/B), EnterpriseValue to Sales (EV/Sales), EnterpriseValue to EBITDA (EV/EBITDA), and Price to Book (P/B) ratios derived from trading data of similar public companies or deal pricing data of similar M&A transactions.
I do report on a few market-wide data items especially on risk premiums for both equity and debt. I also report on pricing statistics, again broken down by industry grouping, with equity (PE, Price to Book, Price to Sales) and enterprisevalue (EV/EBIT, EV/EBITDA, EV/Sales, EV/Invested Capital) multiples.
The second was that, starting mid-year in 2020, equity markets and the real economy moved in different directions, with the former rising on the expectations a post-virus future, and the latter languishing, as most of the world continued to operate with significant constraints.
Uber's ownership in Zomato is a result of Zomato's acquisition of Uber Eats India, where Uber received a share of Zomato's equity in exchange. billion), translating into a value per share of 41 INR.
Given the historical roots of the biggest Indian family groups, the Adani Group has been a recent entrant, not making the top ten list (in terms of either operating metrics like revenues or market-based numbers like market capitalization or enterprisevalue) as recently as ten years ago, and barely making the top ten list five or six years ago.
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