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Full-Text Articles in Business
A Primer On Eva For Healthcare Providers, James L. Grant
A Primer On Eva For Healthcare Providers, James L. Grant
Financial Services Forum Publications
The concept of economic profit (EVA) has proved successful in the field of corporate finance since its adoption by several U.S. and International companies over the past 25 years. Unlike accounting earnings, EVA is a measure of a company’s true earnings because it fully “accounts” for the costs of all forms of financing, including debt and equity. In the EVA view, a company is not truly profitable unless it earns a return on capital that bests the opportunity cost of capital. That being said, the question that we address here is how to measure the economic profit of providers in …
Estimating The Required Return In A World Of Heightened Uncertainty: Emphasizing The Equity Risk Premium, James L. Grant, James A. Albate, Chris Rowberry
Estimating The Required Return In A World Of Heightened Uncertainty: Emphasizing The Equity Risk Premium, James L. Grant, James A. Albate, Chris Rowberry
Financial Services Forum Publications
Heightened uncertainty over the past five years--due to the bursting of the NASDAQ bubble, the recession of 2001, the September 11th attacks, accounting scandals, and the oil shocks of 2005--has brought new challenges for securities analysts and portfolio managers. This observation is particularly relevant for fundamental equity managers using price relative and/or discounted cash flow (DCF) models. While correctly worrying about values of cash flow input (dividends, free cash flow, economic earnings) to DCF models, portfolio managers must be especially aware of risk factors that impact the required return or discount rate, and relatedly, market valuation multiples. This discount rate …