Musings on Markets

FEBRUARY 8, 2025

I spend most of my time in the far less rarefied air of corporate finance and valuation, where businesses try to decide what projects to invest in, and investors attempt to estimate business value. A key tool in both endeavors is a hurdle rate a rate of return that you determine as your required return for business and investment decisions.

Hurdle Rate 72

Hurdle Rate Valuation Corporate Finance Currencies 72

Musings on Markets

JANUARY 10, 2025

Noise in predictions : One reason that the expert class is increasingly mistrusted is because of the unwillingness on the part of many in this class to admit to uncertainty in their forecasts for the future. Since I teach corporate finance and valuation, I find it useful to break down the data that I report based upon these groupings.

Corporate Finance 119

Corporate Finance Valuation Finance Numbers 119

CFO News Room

JANUARY 20, 2023

That expected devaluation in the high-inflation currency is not risk, though, since it can and should be incorporated into your forecasts. If a firm is badly managed, and you expect it to remain badly managed, you can and should build in that expectation into your forecasts of that company’s earnings and value.

Hurdle Rate 130

Hurdle Rate Currencies Investments Corporate Finance 130

Musings on Markets

FEBRUARY 8, 2022

That expected devaluation in the high-inflation currency is not risk, though, since it can and should be incorporated into your forecasts. If a firm is badly managed, and you expect it to remain badly managed, you can and should build in that expectation into your forecasts of that company's earnings and value.

Hurdle Rate 95

Hurdle Rate Currencies Investments Corporate Finance 95

Musings on Markets

AUGUST 15, 2023

After the rating downgrade, my mailbox was inundated with questions of what this action meant for investing, in general, and for corporate finance and valuation practice, in particular, and this post is my attempt to answer them all with one post. and the reverse will occur, when risk-free rates drop.

Investments 98

Investments Currencies Treasury Hurdle Rate 98

Musings on Markets

JANUARY 20, 2021

With an index like the S&P 500, you can outsource these estimates at least for the near years, by looking at consensus forecasts from analysts tracking the index. Risk free rates over time : While it is generally not a good idea to play interest rate forecaster, we are in unusual times, with rates close to all time lows.

Treasury 52

Treasury Investments Marketing Valuation 52

Musings on Markets

JANUARY 9, 2021

To illustrate, consider a practice in valuation, where analysts are trained to add a small cap premium to discount rates for smaller companies, on the intuition that they are riskier than larger companies. It is very likely that these rules of thumb were developed from data and observation, but at a different point in time.

Valuation 52

Valuation Currencies Numbers Corporate Finance 52