How Do I Use the CAPM to Determine Cost of Equity?
The Capital Asset Pricing Model (CAPM) is a financial model that is used to determine the expected return on an investment based on its risk level. The CAPM can be…
Earnings Call
An earnings call is a conference call between a company and analysts or investors in which the company discusses its financial performance, including revenue, profits, and expenses. Earnings calls are…
Equity Financing vs. Debt Financing: What’s the Difference?
Equity financing and debt financing are two options that companies can use to raise capital for their business. Equity financing involves selling ownership stakes in the company, such as stock…
Private vs. Public Company: What’s the Difference?
Private companies and public companies are two types of business structures that differ in terms of ownership, regulation, and access to capital. Private companies, also known as privately-held companies, are…
Capital Budgeting: What It Is and How It Works
Capital budgeting is the process of evaluating and selecting long-term investments, such as new equipment, real estate, or research and development projects. Capital budgeting helps companies allocate their financial resources…
Stock Buybacks: Why Do Companies Buy Back Shares?
Stock buybacks, also known as share repurchases, are a way for companies to reduce the number of outstanding shares of their stock. When a company buys back its own shares,…
Money Market Funds: What They Are, How They Work, Pros and Cons
Money market funds are investment vehicles that invest in short-term, low-risk securities, such as Treasury bills, certificates of deposit (CDs), and commercial paper, and aim to preserve capital and provide…
Mutual Funds: Different Types and How They Are Priced
Mutual funds are investment vehicles that pool together money from many investors and use it to buy a diversified portfolio of securities, such as stocks, bonds, or a combination of…
Mutual Fund vs. ETF: What’s the Difference?
Mutual funds and exchange-traded funds (ETFs) are both investment vehicles that allow investors to buy a diversified portfolio of securities, such as stocks, bonds, or a combination of both. However,…
Is Morningstar’s Rating System an Accurate Ranking Tool?
Morningstar is a financial research firm that provides information and analysis on a wide range of financial products, including mutual funds, exchange-traded funds (ETFs), and individual securities. Morningstar is known…