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July 25, 2022
How to Calculate and Interpret the Capital Asset Pricing Model (CAPM)

In this article, I will show you how to calculate and interpret the capital asset pricing model (CAPM). The CAPM is often used to calculate the cost of equity (re), which is common practice when calculating the weighted average cost of capital (WACC) for company projects or for stock market investors attempting to estimate the […]

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March 17, 2021
How to Calculate and Interpret the Weighted Average Cost of Capital (WACC)

In this article, I will explain how to calculate and interpret the weighted average cost of capital (WACC), and will walk through a step-by-step example for a real publicly-traded company in the U.S. stock market. The WACC is a calculation of a firm's "cost of capital," which in relation to investors and analysts is the […]

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January 6, 2021
Why the Weighted Average Cost of Capital (WACC) Is Flawed as the Discount Rate

In this article, I will discuss why the weighted average cost of capital (WACC) is flawed as the discount rate, and what individual investors can use instead to discount future cash flows in a present value calculation. The WACC is a calculation of a firm's "cost of capital," which is the weighted average of a […]

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February 28, 2022
How the Three Financial Statements Are Linked

In this article, I will explain how the three financial statements are linked. This will be accomplished by providing an overview of the three financial statements and then navigating through an integrated financial statement model using a simple business model. The three financial statements are the cash flow statement, the income statement, and the balance […]

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July 4, 2020
How to Effectively Analyze Company Debt

In this article, I'll show you how to effectively analyze company debt through analyzing the three primary financial statements (income statement, cash flow statement, and balance sheet) for a real publicly traded company. I'll also highlight the ratios we can use to further determine whether a company is capable of managing its debt. Understanding how […]

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May 19, 2022
How to Calculate the Intrinsic Value of a Company Like Benjamin Graham

In this article, I will show you how to calculate the intrinsic value of a company like Benjamin Graham. Graham is widely known as the "father of value investing" and wrote The Intelligent Investor and Security Analysis, two very notable books on value investing. Graham also famously served as a mentor to Warren Buffett, who […]

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March 15, 2021
How to Calculate the Intrinsic Value of a Company Like Warren Buffett

In this article, I will show you how to calculate the intrinsic value of a company like Warren Buffett, using his approach to discounted cash flow (DCF) valuation. This will be accomplished by looking through the Berkshire Hathaway shareholder letters, the Berkshire Hathaway website, and from reading the transcripts of any speeches and interviews Buffett […]

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December 18, 2021
How to Value Companies Using the 10 Cap Stock Valuation Method

In this article, I will show you how to value companies using the 10 cap stock valuation method. This is a method of stock valuation that originated within real estate, and was created by Phil Town to value companies in the stock market. This valuation method is particularly useful for more established businesses and should […]

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November 7, 2021
How to Evaluate and Compare ETFs

In this article, I will show you how to evaluate and compare exchange traded funds (ETFs). With more than 2,204 ETFs in the U.S. alone, identifying the right ETFs in every area of the market (equities, fixed income, gold, commodities, etc.) can be a daunting task. This article will therefore provide a comprehensive framework that […]

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