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What Is the Interest Coverage Ratio? The interest coverage ratio is a financial metric that measures a company’s ability to make interest payments on its debt. The interest coverage ratio is calculated by dividing a company’s earnings before interest and taxes (EBIT) by its interest expenses. A high interest coverage ratio indicates that a company […]

The cost of debt is the rate of interest that a company pays on its outstanding debt. The cost of debt is used in weighted average cost of capital (WACC) calculations for valuation purposes, which makes it important in everyday finance and market contexts.   How the Cost of Debt Works The cost of debt […]

Covariance measures the directional relationship between two variables. Covariance is used in portfolio theory and modern portfolio theory. Covariance is a statistical measure that calculates the degree to which two variables vary together. Covariance can be positive or negative, and it is typically represented by a covariance matrix. Covariance is used in finance to measure […]

Heteroskedasticity is a condition in which the variance of a statistical variable is non-constant across values of that variable. In other words, heteroskedasticity occurs when the size of the error term varies with the values of the independent variables.   Heteroskedasticity – Key Takeaways Heteroskedasticity is a type of statistical error that results in inconsistent […]

NFTs are often criticized for their environmental impact. The process of creating an NFT can be very energy-intensive, and the Ethereum network – which is currently the most popular blockchain for minting NFTs – is estimated to use as much electricity as the entire country of Chile. This has led some to believe that NFTs […]

What Is Multiple Linear Regression? Multiple linear regression is a statistical technique that is used to predict the value of a dependent variable (also known as an outcome variable) based on the values of one or more independent variables (also known as predictor variables). The goal of multiple linear regression is to find the best-fitting […]

For Shiba Inu (SHIB) to reach one cent, the cryptocurrency would have a market value of $5.5 trillion, given the number of coins in circulation stand at 550 trillion. This is many multiples of the market value of Bitcoin and the entire cryptocurrency market. So, it is highly unlikely that SHIB can reach one cent […]

A Ponzi scheme and a pyramid scheme are both types of investment fraud, but they differ in their structure and how they’re carried out. A Ponzi scheme is a type of investment scam in which returns are paid to existing investors from funds contributed by new investors, rather than from any actual profit earned. The […]

The quality of a company and which financial, operating, investing, and business metrics to use to assess it can be subjective because it largely depends on its purpose. A for-profit company has a different type of purpose than a non-profit. In this case, we are going to consider the question from the vantage point of […]

Over the long run, an economy boils down to productivity. When we trade markets and invest our money, our goal is to generate income. That income, over the long run, is a function of productivity and is the biggest driving force of economies over time. In the near term, it’s economic cycles that make the […]