Category Archives: valuation

The cost and value of variability in electricity generation

November 8, 2011 – 10:07 am

The Bloomberg terminal offers an LCOE function provided by its New Energy Finance unit. The function calculates the levelized cost of electricity for a number of generation technologies. The LCOE is the discounted lifetime cost of a generating one unit of electricity from a particular plant type taking into account all capital and operating costs. [...]

By John Parsons | Also posted in commodities, volatility | Comments (2)

Shoot the messenger?

October 14, 2011 – 7:33 am

Something about yesterday’s earnings announcement by JPMorgan has folks rattled: Third-quarter results included the following significant items:$1.9 billion pretax ($0.29 per share after-tax) benefit from debit valuation adjustment (“DVA”) gains in the Investment Bank, resulting from widening of the Firm’s credit spreads… The market is pricing JPMorgan’s outstanding debt with higher spreads, i.e., at a [...]

By John Parsons | Also posted in accounting, credit risk, debt/liabilities | Comments (0)

Risk free rates and value: Dealing with historically low risk free rates

October 3, 2011 – 4:45 am

Aswath Damodaran, at NYU, has a nice post on the right and wrong ways to implement valuations in the light of the historically low interest rates on Treasuries and other sovereign debt. The trick is to think through the consequences on all elements of the valuation.

By John Parsons | Also posted in pricing risk | Comments (0)
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