Musings on Markets

FEBRUARY 10, 2021

What is a hurdle rate for a business? In this post, I will start by looking at the role that hurdle rates play in running a business, with the consequences of setting them too high or too low, and then look at the fundamentals that should cause hurdle rates to vary across companies. What is a hurdle rate?

Hurdle Rate 52

Hurdle Rate Currencies Investments Valuation 52

CFO News Room

JANUARY 20, 2023

In my last point on inflation, I noted that a currency with higher inflation can be expected to depreciate over time against a currency with lower inflation. That expected devaluation in the high-inflation currency is not risk, though, since it can and should be incorporated into your forecasts.

Hurdle Rate 130

Hurdle Rate Currencies Investments Corporate Finance 130

Musings on Markets

FEBRUARY 8, 2022

In my last point on inflation, I noted that a currency with higher inflation can be expected to depreciate over time against a currency with lower inflation. That expected devaluation in the high-inflation currency is not risk, though, since it can and should be incorporated into your forecasts.

Hurdle Rate 67

Hurdle Rate Currencies Investments Corporate Finance 67

Musings on Markets

JANUARY 27, 2021

In this post, I will take a look at these other markets, starting with a way of dividing investments into assets, commodities, currencies and collectibles that I find useful in thinking about what I can (and cannot) do in those markets, and then reviewing how these markets performed during 2020. Currencies : A currency serves three functions.

Currencies 52

Currencies Investments Marketing Treasury 52

Musings on Markets

AUGUST 15, 2023

I was reminded of that paper a few weeks ago, when Fitch downgraded the US, from AAA to AA+, a relatively minor shift, but one with significant psychological consequences for investors in the largest economy in the world, whose currency still dominates global transactions. and the reverse will occur, when risk-free rates drop.

Investments 80

Investments Currencies Treasury Hurdle Rate 80

Musings on Markets

JULY 25, 2023

S&P, Moody's and Fitch, in addition to rating companies for default risk, also rate governments, and they rate them both on local currency debt, as well as foreign currency debt. I know that the currency choice is the source of angst for many analysts, and I think unnecessarily so. I have my reasons.

Hurdle Rate 52

Hurdle Rate Currencies Valuation Marketing 52

Musings on Markets

JANUARY 28, 2024

In particular, there are wide variations in how risk is measured, and once measured, across companies and countries, and those variations can lead to differences in expected returns and hurdle rates, central to both corporate finance and investing judgments. What's coming?

Hurdle Rate 93

Hurdle Rate Concentration Investments Finance 93