Valuation

Equity Risk Premiums (ERP): Determinants, Estimation, and Implications – The 2024 Edition ArXiv ID: ssrn-4751941 “View on arXiv” Authors: Unknown Abstract The equity risk premium is the price of risk in equity markets, and it is not just a key input in estimating costs of equity and capital in both corporate finan Keywords: Equity Risk Premium, Asset Pricing, Cost of Capital, Valuation Complexity vs Empirical Score Math Complexity: 5.0/10 Empirical Rigor: 7.0/10 Quadrant: Holy Grail Why: The paper introduces advanced financial theory and a wide array of estimation methodologies (implied premiums, surveys) but is grounded in extensive real-world data analysis, including country-specific risk premiums and market volatility metrics. flowchart TD A["Research Goal: ERP Determinants & Estimation"] --> B["Data Inputs"] B --> C{"Methodology: Historical vs. Forward<br>Integration of Macroeconomic Variables"} C --> D["Computational Processes<br>Model Estimation & Valuation Metrics"] D --> E["Key Findings: ERP Trends & Implications<br>Cost of Capital Updates"]

Ten Badly Explained Topics in Most Corporate Finance Books ArXiv ID: ssrn-2079055 “View on arXiv” Authors: Unknown Abstract This paper addresses 10 corporate finance topics that are not well treated (or not treated at all) in many Corporate Finance Books. The topics are: 1. Where doe Keywords: Corporate Finance, Capital Budgeting, Cost of Capital, Valuation, Corporate Equity Complexity vs Empirical Score Math Complexity: 4.5/10 Empirical Rigor: 1.0/10 Quadrant: Philosophers Why: The paper focuses on conceptual clarification and critique of established financial theory (like WACC and equity premium) with moderate mathematical notation, but it lacks any empirical data, backtests, or implementation details, relying instead on reviewing textbook recommendations and theoretical arguments. flowchart TD R["Research Goal: Identify 10 topics<br>poorly explained in Corporate<br>Finance books"] --> M["Methodology: Content analysis of<br>leading Corporate Finance texts"] M --> D["Data: Leading corporate finance<br>textbooks and literature"] D --> C["Computational Process: Cross-referencing<br>concepts vs. explanations; gap analysis"] C --> F["Key Findings: Identified gaps in<br>Cost of Capital, Valuation,<br>Equity structures, and Capital Budgeting"]

Ten Badly Explained Topics in Most CorporateFinanceBooks ArXiv ID: ssrn-2044576 “View on arXiv” Authors: Unknown Abstract This paper addresses 10 corporate finance topics that are not well treated (or not treated at all) in many Corporate Finance Books. The topics are: Where the Keywords: Corporate Finance, Capital Budgeting, Cost of Capital, Valuation, Corporate Equity Complexity vs Empirical Score Math Complexity: 2.0/10 Empirical Rigor: 1.0/10 Quadrant: Philosophers Why: The paper is a conceptual critique of topics in corporate finance textbooks with no evidence of mathematical derivations or empirical backtesting, focusing on theoretical and pedagogical gaps. flowchart TD A["Research Goal: Identify & explain 10 corporate finance topics poorly covered in textbooks"] --> B["Methodology: Critical review & synthesis of leading corporate finance textbooks & academic literature"] B --> C["Data/Input: Common textbooks & their treatment of Capital Budgeting, Cost of Capital, Valuation"] C --> D["Computational Process: Comparative analysis of theoretical concepts vs. applied practice gaps"] D --> E["Outcome: 10 key topics identified & clarified (e.g., Cost of Capital, Equity Valuation)"] E --> F["Outcome: Revised frameworks for Capital Budgeting & Corporate Finance pedagogy"]

Equity Risk Premiums (ERP): Determinants, Estimation, and Implications – The 2025 Edition ArXiv ID: ssrn-5168609 “View on arXiv” Authors: Unknown Abstract The equity risk premium is the price of risk in equity markets, and it is not only a key input in estimating costs of equity and capital in both corporate Keywords: equity risk premium, cost of equity, valuation, corporate finance, risk and return, Equities Complexity vs Empirical Score Math Complexity: 4.0/10 Empirical Rigor: 6.0/10 Quadrant: Street Traders Why: The paper focuses on practical estimation methods (historical, survey, implied) and uses empirical data from multiple markets, but relies on conceptual frameworks and regression analysis rather than advanced mathematical derivations. flowchart TD A["Research Goal: Determine 2025 Equity Risk Premium"] --> B["Methodology & Data Inputs"] B --> C["Computational Processes"] C --> D["Key Findings & Implications"] subgraph B ["Methodology & Data Inputs"] B1["Historical Market Returns"] B2["Inflation & Treasury Yields"] B3["Valuation Multiples<br>P/E, Dividend Yields"] end subgraph C ["Computational Processes"] C1["Historical Averages"] C2["Build-Up Models<br>ERP = RiskFree + Equity Risk Compensation"] C3["Inverse P/E Implied ERP"] end subgraph D ["Key Findings & Implications"] D1["Updated Cost of Equity<br>Estimates"] D2["Valuation Adjustments<br>for 2025"] D3["Strategic Asset Allocation<br>Guidance"] end

Systematic Comparable Company Analysis and Computation of Cost of Equity using Clustering ArXiv ID: 2405.12991 “View on arXiv” Authors: Unknown Abstract Computing cost of equity for private corporations and performing comparable company analysis (comps) for both public and private corporations is an integral but tedious and time-consuming task, with important applications spanning the finance world, from valuations to internal planning. Performing comps traditionally often times include high ambiguity and subjectivity, leading to unreliability and inconsistency. In this paper, I will present a systematic and faster approach to compute cost of equity for private corporations and perform comps for both public and private corporations using spectral and agglomerative clustering. This leads to a reduction in the time required to perform comps by orders of magnitude and entire process being more consistent and reliable. ...

Financial Analysis of Tesla ArXiv ID: ssrn-3896901 “View on arXiv” Authors: Unknown Abstract This study has done based on the financial analysis of Tesla, inc. to understand its financial position throughout the year 2017 to 2020. The fundamental purpos Keywords: Financial analysis, Tesla, Financial position, Fundamental analysis, Valuation Complexity vs Empirical Score Math Complexity: 1.0/10 Empirical Rigor: 3.0/10 Quadrant: Street Traders Why: The paper employs basic financial ratios (e.g., current ratio, ROE) with no advanced mathematical derivations, but it uses real historical financial data from Yahoo Finance to compute metrics, making it more data-driven than theoretical. flowchart TD A["Research Goal<br>Assess Tesla's Financial Position<br>2017-2020"] --> B["Methodology<br>Fundamental Analysis"] B --> C["Data Sources<br>Annual Financial Statements"] C --> D["Computation<br>Ratios & Valuation Metrics"] D --> E["Key Findings<br>Growth Trajectory & Profitability"]

Equity Risk Premiums (ERP): Determinants, Estimation, and Implications – The 2021 Edition ArXiv ID: ssrn-3825823 “View on arXiv” Authors: Unknown Abstract The equity risk premium is the price of risk in equity markets, and it is not just a key input in estimating costs of equity and capital in both corporate finan Keywords: equity risk premium, cost of equity, capital asset pricing model, valuation, risk pricing, Equities Complexity vs Empirical Score Math Complexity: 2.5/10 Empirical Rigor: 7.0/10 Quadrant: Street Traders Why: The paper uses foundational finance equations (CAPM, multi-factor models) with minimal advanced derivation, placing math complexity low. However, it heavily relies on historical data, surveys, and real-world market data (default spreads, option prices) to estimate and compare equity risk premiums, making it highly empirical and implementation-focused. flowchart TD A["Research Goal: Determine ERP<br>for Corporate Valuation"] --> B["Key Methodology: Historical Analysis"] B --> C["Data Inputs: Historical<br>Stock Returns vs<br>Risk-Free Rates"] C --> D["Computational Process:<br>Calculate Average Historical ERP<br>& Adjust for Market Conditions"] D --> E["Key Findings: ERP is unstable<br>Context-dependent; Required for<br>accurate Cost of Equity &<br>Valuation models"]

Equity Risk Premiums (ERP): Determinants, Estimation and Implications – The 2017 Edition ArXiv ID: ssrn-2947861 “View on arXiv” Authors: Unknown Abstract The equity risk premium is the price of risk in equity markets and is a key input in estimating costs of equity and capital in both corporate finance and valuat Keywords: equity risk premium, cost of equity, risk and return models, capital asset pricing model, valuation, Equities Complexity vs Empirical Score Math Complexity: 4.0/10 Empirical Rigor: 5.0/10 Quadrant: Street Traders Why: The paper employs established financial mathematics (DCF, option pricing) but focuses on estimation methodologies and practical implications rather than novel derivations. It relies heavily on historical and implied market data, with extensive data appendices and real-world applications for valuation and corporate finance, making it implementation-heavy. flowchart TD A["Research Goal<br>Determine the Equity Risk Premium"] --> B["Methodology<br>Historical Implied & Survey Approaches"] B --> C["Data Inputs<br>Historical Market Returns, Bond Yields, Surveys"] C --> D["Computation<br>Estimate Expected Returns & Risk"] D --> E["Key Findings<br>ERP Varies by Market, Estimation Period, and Method; Critical for Cost of Equity & Valuation"]

A Practical Guide to Quantitative Portfolio Trading ArXiv ID: ssrn-2543802 “View on arXiv” Authors: Unknown Abstract We discuss risk, preference and valuation in classical economics, which led academics to develop a theory of market prices, resulting in the general equilibrium Keywords: general equilibrium, market prices, valuation, Multi-Asset Complexity vs Empirical Score Math Complexity: 7.5/10 Empirical Rigor: 3.0/10 Quadrant: Lab Rats Why: The text contains dense mathematical theory including pricing kernels, measure changes, and factor models, but provides no backtesting data, code, or implementation details for the strategies discussed. flowchart TD A["Research Goal: Develop<br>Multi-Asset Portfolio Trading Strategy"] --> B["Methodology: General Equilibrium Theory"] B --> C["Data: Risk Preferences &<br>Market Price Inputs"] C --> D["Computational Process:<br>Valuation & Optimization"] D --> E["Outcome: Executable<br>Quantitative Portfolio"]

Equity Risk Premiums (ERP): Determinants, Estimation and Implications – The 2014 Edition ArXiv ID: ssrn-2409198 “View on arXiv” Authors: Unknown Abstract Equity risk premiums are a central component of every risk and return model in finance and are a key input in estimating costs of equity and capital in both cor Keywords: Equity Risk Premium, Cost of Equity, Risk and Return Models, Valuation, Capital Budgeting Complexity vs Empirical Score Math Complexity: 2.5/10 Empirical Rigor: 4.0/10 Quadrant: Philosophers Why: The paper focuses on conceptual discussion of risk premium determinants and methodological comparisons (historical, survey, implied) with minimal advanced mathematical derivation. While it discusses estimation approaches and financial implications, it does not present code, backtesting results, or detailed statistical implementations, placing it more in the conceptual/theoretical realm. flowchart TD A["Research Goal: Determinants, Estimation & Implications of ERP"] --> B["Key Data Inputs: Historical Returns, Macro-economic Variables, Survey Data"] B --> C["Methodology: Historical & Forward-Looking Estimation Models"] C --> D["Computational Process: Risk Premium Calculation & Adjustment"] D --> E{"Key Findings: ERP Sensitivity to Market Conditions & Valuation Impact"} E --> F["Implication: Cost of Equity & Capital Budgeting Decisions"]