Equity Risk Premium
What is Equity Risk Premium? Equity Risk Premium is the difference between returns on equity/individual stock and the risk-free rate of return. The risk-free rate of return can be benchmarked to longer-term government bonds, assuming zero default risk by the government. It is the excess return a stock pays to the holder over and above...
Weighted Average Shares Outstanding
What is Weighted Average Shares Outstanding? Weighted average shares outstanding refers to the number of shares of a company calculated after adjusting for changes in the share capital over a reporting period. The number of shares of a company outstanding is not constant and may change at various times throughout the year, due to a share...
Dividend vs Share Buyback/Repurchase
The Dividend vs Share Buyback Debate Shareholders invest in publicly traded companies for capital appreciation and income. There are two main ways in which a company returns profits to its shareholders – Cash Dividends and Share Buybacks. The reasons that drive the strategic decision on dividend vs share buyback differ from company to company and...
Leveraged Finance
What is Leveraged Finance? Leveraged finance is the use of an above-normal amount of debt, as opposed to equity or cash, to finance the purchase of investment assets. Leveraged finance is done with the goal of increasing an investment’s potential returns, assuming the investment increases in value. Private equity firms and leveraged buyout firms will employ...
Project Finance - A Primer
Project Finance – A Primer Project finance is the financial analysis of the complete life-cycle of a project. Typically, a cost-benefit analysis is used to determine if the economic benefits of a project are larger than the economic costs. The analysis is particularly important for long-term projects of growth CAPEX. The first step of the...
