Data Update 4 for 2022: Risk = Danger + Opportunity!

Musings on Markets

Risk and Hurdle Rates In investing and corporate finance, 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. Hurdle Rates Risk

The Stock Market Sanity Check

CFO News Room

The weighted average cost of capital (WACC) is typically used as a hurdle rate, meaning the investment’s return must outperform the hurdle rate. The discount rate is the risk-free rate of return or the return that could be earned instead of pursuing the investment.

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How Government Budgetary Decisions Impact the Public Sector

CFO News Room

Some programs are guaranteed, while others are not when there are tough economic decisions to be made. Issues facing the public sector are not unlike some issues facing America’s oldest and largest companies, just on a broader scale.

Data Update 5 for 2022: The Bottom Line!

Musings on Markets

The last few years have been eventful for all companies, with the COVID crisis and ensuing economic shut down causing pain for companies, with recovery coming in 2021, as the global economy opened up again. I will use this data to draw three broad conclusions: Low Hurdle Rate ?

Syndicating Private Real Estate Opportunities

CFO News Room

Michael: So, what did the economics look like on these? I mean, as you’re doing your direct deals of the duplexes, and townhomes, and the rest, what do the economics look like? Executive Summary. Welcome back to the 292nd episode of the Financial Advisor Success Podcast !

CFO 130

Corporate Banks Need Radical Tech Shift, Say Analysts

PYMNTS

“ Global Corporate Banking 2016: The Next-Generation Corporate Bank ” found that less than a third of corporate banking divisions across North America and Asia, and less than half in Europe, experienced “positive and growing economic profit” between 2013 and 2015. The weakest performers fell below the returns hurdle rate across regions and across segments, the report noted.

Data Update 3 for 2021: Currencies, Commodities, Collectibles and Cryptos

Musings on Markets

In my last post , I described the wild ride that the price of risk took in 2020, with equity risk premiums and default spreads initially sky rocketing, as the virus led to global economic shutdowns, and then just as abruptly dropping back to pre-crisis levels over the course of the year.

Data Update 2 for 2021: The Price of Risk!

Musings on Markets

The failures of the signal have been variously attributed to low interest rates, accounting mis-measurement of earnings (especially at tech companies), and by some, to animal spirits. Data Update 4 for 2021: The Hurdle Rate Question.

Marking Time: A new year, a fresh semester and its class time!

Musings on Markets

Thus, you and I can disagree about whether beta is a good measure of risk, but not on the principle that no matter what definition of risk you ultimately choose, riskier investments need higher hurdles than safer investments.

Data Update 1 for 2021: A (Data) Look Back at a Most Forgettable Year (2020)!

Musings on Markets

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. Data Update 4 for 2021: The Hurdle Rate Question.

Restructuring Compensation And Roles To Align For Growth

CFO News Room

Because the economics of profitability start showing up particularly when you’re starting to hire other advisors and staff and team. ” look at the Monte Carlo simulations, look at what is the hurdle rate. So, last year, valuations were high, interest rates were low.