How to Earn Interest on Your Cash Allocation with Low-Risk Treasuries
Updated 3/6/2024 Do you know who is one of the largest players in the treasury market? Surprise! It is Warren Buffett! Bet you would have never guessed! Shocking, I know, but it makes sense because he has said for years he has had trouble finding companies to buy or invest in because of the size […]
Example WACC Calculator Calculation with Walmart (WMT)
The attached calculator can be used by investors to estimate the weighted average cost of capital (WACC) for publicly traded companies. For a larger discussion on WACC and some of the various methods that can be used to calculate the cost of equity and cost of debt, readers are encouraged to explore our larger article […]
Weighted Average Cost of Capital Guide (+WACC Calculator Excel Download)
The weighted average cost of capital (WACC) is a cornerstone of any discounted cash flow valuation and a fundamental learning for every investor’s toolbox. This is because the WACC is used as the discount rate, or required rate of return, when doing a present value calculation of a company. WACC can also be used by […]
Thoughts on the High Yield Bond Market from Warren Buffett
If you were to read Section III.A in the Essays of Warren Buffett, then you’re going to hear all about Buffett’s opinion on the high yield bond market and bonds in general, but let me summarize for you – he doesn’t like them. Buffett’s personal opinion, and it’s one that I 100% agree with, is […]
The H-Model Discovered – CFA Level 2
As a type of Dividend Discount Model (DDM), the H-Model is a valuation tool that has its core methodology based on discounted cash flows, which are approximated here with dividends. The end result is a Net Present Value (NPV) calculation of the future dividends of the company. The H-Model is a popular variation of the […]
An Adjusted Return on Equity Formula so You Don’t Overpay for a Stock
The Return on Equity formula (ROE) is an important metric for judging the profitability of a company and how efficiently management is using the equity that shareholders have invested in the business. However, having a high ROE does not necessarily make a company a good investment. As always with investing, it comes down to price. […]
Using Return on Invested Capital (ROIC) to Evaluate Stocks
One of the most core elements of great investing is understanding what Return on Invested Capital (ROIC) means, and how it can be used to evaluate a company as a potential investment. This is a guest contribution by Cameron Smith. Guest bio: Cameron Smith is a CPA, CMA (Chartered Professional Accountant, Certified Management Accountant) from […]
