The investor is exposed to company-specific risk
for each position in the concentrated portfolio, but what if that idiosyncratic risk can be significantly diminished?
When one examines the riskiest companies as denoted by the KDR, there is the presence of idiosyncratic risk or company-specific risk
matrices need to be drawn up on the basis of experience, fundamentals and hindsight following evaluation of available market analysis reports which are, however, uncertain.
We do not incorporate any potential new acquisitions into our model, but we believe it is prudent to account for this risk by increasing our company-specific risk
This has the unintended consequence of increasing information asymmetry, therefore shifting more company-specific risk
to insiders while shifting market risk to outsiders.
The company-specific risk
premium is added when the company is more risky in the remaining market.
The enterprise equity discount (yield) rate includes three elements: (1) a market-derived, risk-free rate of return; (2) a general (equity) risk premium derived from the public equity markets; and (3) a company-specific risk
Small businesses have much more company-specific risk
than larger companies--Discount rates, used to value businesses, have a "company-specific risk
An investor can eliminate more than 99 percent of company-specific risk
with a portfolio of as few as 20 stocks.
In this article, we will discuss three publications that can serve as a foundation for developing a company-specific risk
The models vary widely, but most rely on two distinct, but interrelated, levels of analysis: a macro assessment of overall country risk and a micro assessment of industry-segment or company-specific risk
Although we are pleased with Dollar General's fourth-quarter results, we prefer to own Family Dollar, given faster square-foot growth, higher operating margins and less company-specific risk
," he said.