Economics Forecasting Hurdle Rate Profit and Loss 
Musings on Markets
AUGUST 15, 2023
As the risk-free rate rises, expected returns on equities will be pushed up, and holding all else constant, stock prices will go down., and the reverse will occur, when risk-free rates drop. That is why the risk-free rate becomes an input into option pricing and forward pricing models , and its absence leaves a vacuum.
Musings on Markets
JANUARY 9, 2021
That said, it does mean that any broad conclusions (about profitability and revenues) that emerge from my data apply to public companies, and it may be dangerous to extrapolate to private businesses, especially in a year like 2020 where private businesses could have been affected more adversely by COVID shutdowns than public companies.
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