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The Goldman Sachs asset management (GSAM) factor model is a quantitative investment model used by financial analysts to assess the potential performance and risk of company. [ 1 ] [ 2 ] [ 3 ] There are various types of factor models – statistical models, macroeconomic models and fundamental models.
In less formal usage, a factor is simply an attribute or collection of related attributes that explain an asset's returns. The original factor model is the capital asset pricing model (CAPM), which predicts that an asset's expected return in excess of the risk-free rate is wholly determined by its exposure to the market factor. More formally ...
Intangible assets, in contrast, carry a higher rate of return due to the same factors above. Averaging these rates of returns, as a percentage of the total asset base, produces a WARA. In theory, the WARA should generate the same cost of capital as the Weighted average cost of capital, or WACC. The theory holds true because the operating entity ...
National Intangible Capital NIC consists of four basic dimensions according to the model by Edvinsson & Malone (1997). [3] This model has been further developed, [4] now consisting 48 different indicators representing the four main NIC categories: [1] Human capital: Capacity and capability of a country population Market capital: Global business ...
The first stage consists of fitting a series of local factor models of the familiar form resulting in a set of factor returns f(i,j,t) where f(i,j,t) is the return to factor i in the jth local model at t. The factor returns are then fit to a second stage model of the form
The measurement of intangible assets poses several challenges. First the “non-physical” nature of intangible assets makes them intrinsically hard to measure and report. Moreover, many intangible asset types, such as brands or design, are still not recognized as investment under national accounting frameworks.
Absolute value models ("Intrinsic valuation") that determine the present value of an asset's expected future cash flows. These models take two general forms: multi-period models such as discounted cash flow models, or single-period models such as the Gordon model (which, in fact, often "telescope" the former). These models rely on mathematics ...
Intangible assets can for example be used in equity finance. For example, many Swiss companies use equity finance to support their growth, particularly Venture capital . The information gathered through interviews indicates that a supportive IP portfolio, particularly when reinforced by robust patents , plays a crucial role as a contributing ...