Evaluating Value

Lesson summary:

The business was valued at $1,500, with an initial investment of $500 for a third of the company. In year five, earnings exceeded $1,500, resulting in over a 100% return. The company spent $2,100 in capital building lemonade stands and earned $2,336, a 155% annual growth rate. Profitability increased from 1.3% to 28.6%. The equity investor earned a 100% return, while the lender received a 10% return. Equity investors take more risk and have the potential for higher returns. Lenders are entitled to the first value of liquidated assets.

WELCOME BACK

INSTANT GUEST MEMBERSHIP ▸ FREE FOREVER ACCESS EVENTS, EDUCATION & MORE

BLOOMBERG GLOBAL NEWS

Bloomberg video news feed with live charts, watchlists & fundamentals
Audio/video feed with live charts, watchlists & fundamentals
CHARTS + FEED

RBA ECONOMIC UPDATES

Periodic updates on the Australian economy, direct from the RBA, with live charts, watchlists & fundamentals
Audio/video feed with live charts, watchlists & fundamentals
CHARTS + FEED

US FEDERAL RESERVE UPDATES

Bloomberg News focussed upon the Federal Reserve, with live charts, watchlists & fundamentals
Audio/video feed with live charts, watchlists & fundamentals
CHARTS + FEED

FX/GLOBAL BRIEFS

Brief global updates with a focus upon currencies, with live charts, watchlists & fundamentals
Audio/video feed with live charts, watchlists & fundamentals
CHARTS + FEED

ASX MARKET UPDATES

ASX-focussed updates, with live charts, watchlists & fundamentals
Audio/video feed with live charts, watchlists & fundamentals
CHARTS + FEED

BLOOMBERG BRIEFS

Global briefs from Bloomberg with live charts, watchlists & fundamentals
Audio/video feed with live charts, watchlists & fundamentals
CHARTS + FEED