Valutico

FEBRUARY 27, 2024

To refine the selection of the discount rate, it’s important to draw on inputs from credible sources regarding economic, industry and company specific risk factors. Risk Premium: The risk premium reflects the additional return investors demand for taking on the risk of investing in the overall market.

Discounted Cash Flow 52

Discounted Cash Flow Risk Premium Risk-free Rate Beta 52

Andrew Stolz

AUGUST 5, 2020

Investments are exposed to two types of risk: systematic and unsystematic. Systematic risks are uncontrollable market risks due to unavoidable external factors. Systematic risks include interest rates, economic fluctuations, political unrest, pandemics, etc. How Do You Calculate the Capital Asset Pricing Model?

Risk-free Rate 52

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

Valutico

FEBRUARY 13, 2025

It quantifies an asset’s risk relative to the market. Beta’s limitations include its reliance on historical data, potential inability to capture short-term fluctuations and company-specific risks, and sensitivity to benchmark choice. Different indices may yield different beta values for the same asset.

Beta 52

Beta Covariance Risk-free Rate Specific Risk 52

Equilest

SEPTEMBER 14, 2024

By associating a business with the right industry, evaluators can apply industry-specific benchmarks, market trends, and valuation multiples, ensuring a more accurate assessment of the company’s worth. Industry-Specific Risks and Opportunities Every industry comes with specific risks and opportunities.

Business Valuation 40

Business Valuation Specific Risk Technology Comps 40

Musings on Markets

FEBRUARY 10, 2021

If you put all your money in one or the other of these companies, you are exposed to all these risks, but if you spread your bets across a dozen or more companies, you will find that company-specific risk gets averaged out.

Risk-free Rate 52

Risk-free Rate Risk Premium Start-ups Equity 52

Reynolds Holding

AUGUST 9, 2023

Require these banking organizations to calculate their risk-based capital ratios under the existing standardized approach and expanded standardized approach (a “dual-stack” requirement), and use the lower (less favorable) ratio of the two. About 40 banking organizations currently are subject to the market risk capital requirement.

Banking 52

Banking Market Risk Marketability Finance 52

Reynolds Holding

APRIL 15, 2025

ENDNOTES [1] [link] [2] [link] [3] Our simplified event study compares the returns of equal-weighted portfolios of DE Companies and Non-DE Companies without controls for firm-specific risk factors such as exposure to market risk, size or other industry-specific performance. [4]

Firm-specific Risk 64

Firm-specific Risk Specific Risk Marketability Market Risk 64