Questions tagged [valuation]
The process of determining the price - the value - of an asset.
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Calculating value of vanilla swap after effective date
I'm trying to find the value of a fixed to float interest rate swap using Rateslib library but I'm running into a few issues.
I've followed the code exactly as the link here but now I'm trying to ...
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Clarifying the Fundamental Difference Between Growth and Value Stocks
The more I think about the fundamental difference between growth and value stocks the more confused I am. Both strategies seem to exploit market mispricing: growth investors target underestimated ...
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Calculating FX Forwards Using Spot Prices and Discount Factors for Exotic Currency Pairs
We need to value FX forwards for some exotic currency pairs using a third-party system that does not provide the forward rates. The system can provide spot prices. Is it correct (real) to calculate ...
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How do I determine the ideal selling price for a cash flow that rises with inflation?
Let's say I own a parking space. I have two options:
I can rent out this parking space for $1,000/month. I am assuming that the rent will keep pace with inflation, which we'll call 2% over the long ...
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FX-Effect on (foreign) interest rate future
this is not (directly) a quantitative question but since there are so many knowledgeable people here and I've found so many helpful discussions in the past, I ask it nonetheless (I haven't found an ...
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Total return swap valuation of return leg
I have a question on valuing the return leg of a Total Return Swap (TRS).
Consider a TRS where I receive the return of an underlying bond (let's ignore default). The TRS was traded at time $t = 0$. At ...
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Autocallables - valuation/modelling/booking
Recently heard a view on how one should model/book autocallable swaps (in its basic form where there is a series of observation dates on which the product autocalls and there is exposure to the ...
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Real Options for investment valuation (Basics)
Thank you for checking out this post.
I already asked a question once on this forum, and you did a great job helping me out with that topic, as I couldn’t have come across a solution myself.
This time,...
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Accuracy/Quality of financial data: revised financials or historical financials?
I am currently working on calculating financial metrics, particularly Free Cash Flow to Equity (FCFE) etc., for investment analysis.
In the context of financial analysis, I'm wondering which set of ...
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Floating side value of a swap [duplicate]
I have some trouble to understand on valuing the floating side of a swap.
In my book, the value of floating side at the time t is;
$$ P(t,T_0) - P(t,T_n) $$
Where $$ P(t,T_n)$$ denotes the value of ...
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Valuation via decomposition or via simulation of the underlying?
My question might be very straight forward but I have seen both approaches being followed in practice so I am curious to see if there are arguments in favor or against each one. I am explaining my ...
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Non-stationarity and repricing as a source of idiosyncratic and systematic "risk"?
1.Assuming a one period economy with two assets in which cash flows are assigned certain probabilities, using the CAPM, we can derive the P0 given the E(CF) at t1. Within this distribution, we have ...
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Why do we need an ex-dividend date? [closed]
Why do we need an ex-dividend date? What is the problem with the ex-dividend date being the same as the payment date? Why are they separate? What problem does having a separate ex-dividend date solve?
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How to approximate a function in the H-model
I have been looking to understand the H-model in finance, that is used for stock price valuation. In particular, I wanted to formally derive the final formula:
$$PV=\frac{D}{r-g_2}\left[1+g_2+\frac{H}{...
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In traditional asset pricing and valuation, why does the cost of equity increase with the AMOUNT of leverage but not with DEFAULT RISK? [closed]
When a firm's default risk increases, the cost of debt obviously rises, which increases the WACC and decreases firm value. However, what happens to the cost of equity in this case? Has the proportion ...
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