Forum Search: capital markets

RE: How to determine reasonable debt covenants for an LBO deal?
Debt covenants are determined by the Company’s industry. In the past few years, LBO’s have increasingly been structured with covenant-lite debt, meaning that they have fewer requirements and restrictions than traditional debt structure. However, as debt markets substantially decline (as in 2007 ... Read More
Go to post added 9 years ago
RE: Merger Modeling Basics: Questions on Merger model
It looks like you are a prime candidate for our Complex LBO and Super-Advanced Merger Modeling! As explained in the videos, your questions relate to our simple merger model which is meant to give a taste and a proxy of the all-out merger model. To answer your question: 1) Accretion/Dilution is a... Read More
Go to post added 9 years ago
Re: Complex LBO - tender costs
Since we did not take the actual future cash flows of the bond, we estimated it in the model by assuming (somewhat random) %age as you noted. If you did have the actual future cash flows of the bonds (notably, future interest payments), you would take the NPV of such future cash flows + accrued inte... Read More
Go to post added 9 years ago
Re: Dividend payment for Debt Paydown
You answered your own question. How you treat dividends assumptions depends on your goal. If building a transaction oriented model (i.e. investment banking) or run-rate model and dividends are fairly steady, then you incorporate the dividends as we did in the models. That is, dividends are essenti... Read More
Go to post added 9 years ago
Re: Location of additional file that is referened?
Hello, there's an exhibit video discussing depreciation vs. capital expenditures here: "Overview of Financial Markets + Exhibits" package -> "Supplementary Video Exhibits" -> "Depreciation in Future" Please let us know if you're looking for something else and we'll point you in the right directio... Read More
Go to post added 1 year ago
RE: Please clarify if any value is gained by buying back stock-1
In general, if markets are efficient and an asset is fairly priced, then there shouldn't be any excess returns at all and everything is a zero NPV project in theory. I usually say there are three reasons why a stock price should go up upon a share repurchase: (i) Financial / Mathematical: reduces sh... Read More
Go to post added 9 years ago
CapitalIQ Shortcuts Override
Hi, I was wondering if it would be possible to change the CapitalIQ pre-built shortcuts to the WSTMacros5.8E add-in shortcuts?
Go to post added 2 years ago
capital lease in TEV
Hi I understand that you exclude capital lease from TEV as it's not exactly debt and the difference with operating lease is just the accounting definition. However if you exclude capital lease from TEV, does that mean that you have to include any interest and depreciation effect from lease from ... Read More
Go to post added 5 years ago
Capital Leases, and other scenarios
1. Why capital leases are not included in the total debt figure? Why operating leases are not included in interest expense ratios and debt ratios? 2. When you encounter that Total Debt/Total Capitalization is lower than the company's target ratio, will we see a spreadsheet in a different module t... Read More
Go to post added 6 years ago
Capital charge under EVA
Hi, I think the capital charge is supposed to be calculated using the prior year's ending total capital. So, 2006's capital charge should be 11% of 2005's total capital or $87,949, or $9,674; 2007's should be $10,956, and so on. This is using the figures from the core model not from the video. Is th... Read More
Go to post added 7 years ago
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