Estimating the global price of USD inflation risk

Executive summary for the mildly-interested reader: Although the average holding return for 1-year maturity US Treasuries during 2014-2018 was a negative .50% inside the US, the estimated return to such USD inflation risk in the…

Biological asset valuation: Risk pricing

This article continues from my basic discussion of biological asset valuation which presented an overview of the financial reporting requirements for biological assets, the fundamental problem of biological asset valuation, and a general solution to…

AMAZON: “International cost of capital estimation”

Available now on Amazon. The book presents a definitive, concise treatment of the modern capital asset pricing theories and related empirical methods needed by serious finance professionals for developing unbiased and reliable estimates of international…

An idiosyncratic view on ICC estimation methods

Regarding international cost of capital (ICC) estimation … I became involved in valuation via M&A transaction advisory services for mid-market industrial companies circa 1990. Because I was based in the Midwestern USA, many clients were…

What all valuation professionals need to know about IPCPL

In the valuation profession, there have been long-standing, unproductive arguments about how best to estimate something called the discount for lack of marketability (DLOM) for assets traded only in private capital markets.  In contrast, estimation…

What all finance professionals need to know about international cost of capital

In his book, “A Theory of Global Capitalism: Production, Class, and State In a Transnational World” published in 2004, the well-known sociologist William I. Robinson documents the how increasing global capital mobility has resulting in…

International cost of capital estimation

You are a well-trained finance professional working in a globalized capital market environment. You need to know the basics of estimating international cost of capital. All that is required to develop accurate, reliable estimates of…

Credit-linked notes: Overview

Credit-linked notes (CLNs) are financial instruments that can generally be used to simultaneously raise term funding, hedge credit risk, meet financial reporting objectives, and–in some cases–improve bank regulatory capital ratios.  Here is an outline of…

Biological asset valuation: Basics

This is a highly-technical article directed towards finance professionals, accountants, and auditors involved in corporate financial reporting; more specifically, for those professionals who have responsibility with understanding or complying with the biological asset valuation requirements…

Distressed credit portfolio valuation

The prolonged global economic downturn, begun in 2008-2009, has resulted in large distressed credit portfolios in banks and is putting them in potential non-compliance with Basel III capital requirements.  Here’s what bankers should know ……