Comment, question or quotation of the day

18-10-2019 : Question from a Vernimmen reader.

For which type of companies is direct valuation (P/E ratio and discounting of dividends) no worse than indirect valuation (determination of the enterprise value first by using multiples of operating income or of EBITDA or discounting of free cash flows, then subtracting the value of net debt)? For a company that has no significant net bank and financial debts and pays almost all of its profits in dividends and/or share buybacks, such as BIC for example. These cases are still quite rare. The absence of significant net debt avoids the distortion of the multiples that debt causes. A payout ratio close to 100% means that dividends and free cash flows are very close, which avoids, in the direct approach of discounting dividends, mispricing reinvestment since it is (almost) zero. For more details, see Chapter 37 of the Vernimmen. Have a nice day.  

17-10-2019 : Quote of the day

“If all of our work goes towards amassing material goods, we end up building our own prison. We lock ourselves up, alone with our dead currency that buys nothing worth living for.”             Antoine de Saint-Exupéry


The glossary provides definitions for a couple of thousands of financial, stock market or economic terms.
This financial dictionary allows beginners to progress in their learning of finance and to experts to cease the precise meaning of a sentence.


The Quiz offers over 300 questions with answers to progress in your understanding of finance and to test your knowledge.
Questions are sorted by key topics (financial analysis, investment and stock markets, value, financial engineering and financial management).


We frequently ask our readers to give us their point of view on a specific topic.
You will find here the current survey with the to-date status of answers as well as past polls.

Financial data

Thanks to our partner Infinancial, we can offer on this page financial data on over 16 000 groups around the world.
Updated several times a year, this database offers information sometimes hard to find elsewhere (beta, …)

The Letter

Number 123 of October 2019

News : How to finance the construction in Mali of the largest solar power plant in West Africa?

Statistics : Capital expenditures, dividends and share buybacks in the United States

Research : How are shares allocated to investors in IPOs

Q&A : pre-money or post money?

COMMENTS : Comments posted on Facebook