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In the first five posts, I have looked at the macro numbers that drive global markets, from interest rates to risk premiums, but it is not my preferred habitat. A key tool in both endeavors is a hurdlerate a rate of return that you determine as your required return for business and investment decisions.
In fact, the business life cycle has become an integral part of the corporatefinance, valuation and investing classes that I teach, and in many of the posts that I have written on this blog. In 2022, I decided that I had hit critical mass, in terms of corporate life cycle content, and that the material could be organized as a book.
In corporatefinance and investing, which are areas that I work in, I find myself doing double takes as I listen to politicians, market experts and economists making statements about company and market behavior that are fairy tales, and data is often my weapon for discerning the truth. Financing Flows 5. Beta & Risk 1.
I am in the third week of the corporatefinance class that I teach at NYU Stern, and my students have been lulled into a false sense of complacency about what's coming, since I have not used a single metric or number in my class yet. Data Update 4 for 2025: Interest Rates, Inflation and Central Banks!
Risk and HurdleRates In investing and corporatefinance, we have no choice but to come up with measures of risk, flawed though they might be, that can be converted into numbers that drive decisions. Not surprisingly, both these forces play a role in how companies and investors set hurdlerates.
Risk and HurdleRates In investing and corporatefinance, we have no choice but to come up with measures of risk, flawed though they might be, that can be converted into numbers that drive decisions. Not surprisingly, both these forces play a role in how companies and investors set hurdlerates.
Check rules of thumb : Investing and corporatefinance are full of rules of thumb, many of long standing. When valuing or analyzing a company, I find myself looking for and using macro data (risk premiums, default spreads, tax rates) and industry-level data on profitability, risk and leverage.
This is the last of my data update posts for 2023, and in this one, I will focus on dividends and buybacks, perhaps the most most misunderstood and misplayed element of corporatefinance. Viewed in that context, dividends as just as integral to a business, as the investing and financing decisions.
Check rules of thumb : Investing and corporatefinance are full of rules of thumb, many of long standing. When valuing or analyzing a company, I find myself looking for and using macro data (risk premiums, default spreads, tax rates) and industry-level data on profitability, risk and leverage. EV/EBIT and EV/EBITDA 4.
In fact, that may explain why firms that trade at low EV to EBITDA multiples are more likely to become targets in leveraged buyouts (LBOs) or leveraged recapitalizations. Business risk : Not surprisingly, for any given level of cash flows and marginal tax rate, riskier firms will be capable of carrying less debt than safer firms.
I went into what’s called corporatefinance, what people would see now as sort of M&A department. CHANCELLOR: Well, I was actually in a sort of subgroup there, which was called corporate strategy. But I didn’t last very long there because I thought I didn’t like corporatefinance.
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