Forum Search: capital markets
Maintenance capex vs capital expenditures revisited
Full Question:
Should capital expenditures that are not purely maintenance capex be reflected in the cash flows as an outflow of cash as long earnings from that investment are reflected in the EBIT?
Full Question:
Should capital expenditures that are not purely maintenance capex be reflected in the cash flows as an outflow of cash as long earnings from that investment are reflected in the EBIT?
How to value a company if we do or don't invest?
Full Question: We are using DCF to value an existing equity investment. The company is planning a capital increase two years down the road. We may or may not participate in the capital increase. My question is how should value our existing equity investment under these two scenarios (whether we ... Read More
Full Question: We are using DCF to value an existing equity investment. The company is planning a capital increase two years down the road. We may or may not participate in the capital increase. My question is how should value our existing equity investment under these two scenarios (whether we ... Read More
How do convertible bonds affect total capitalization?
Full Question:
Assume we convert all the in-the-money convertible bonds. Would this effect a firm's total capitalizaiton? If, no, then do we simply move the amount of CB from debt to stockholder's equity? Thanks.
Full Question:
Assume we convert all the in-the-money convertible bonds. Would this effect a firm's total capitalizaiton? If, no, then do we simply move the amount of CB from debt to stockholder's equity? Thanks.
Mechanics of FCFF calculation
Full Question: I have just started to learn how to calculate FCFF and have an obvious “newbie” question - Can the FCFF be calculated for the current quarter, or past year, without estimating forward? Simply put, is it logical and/or accepted industry practice to look at the current, or past FCF... Read More
Full Question: I have just started to learn how to calculate FCFF and have an obvious “newbie” question - Can the FCFF be calculated for the current quarter, or past year, without estimating forward? Simply put, is it logical and/or accepted industry practice to look at the current, or past FCF... Read More
Stock-Based Comp adjustment
Full Question: So the short answer to the question is actually that when companies account for stock-based comp. it is a non-cash charge that should be added back in the CFO area. However, because stock-based comp. must be accounted for by the company as a potential benefit (b/c upon exercise the c... Read More
Full Question: So the short answer to the question is actually that when companies account for stock-based comp. it is a non-cash charge that should be added back in the CFO area. However, because stock-based comp. must be accounted for by the company as a potential benefit (b/c upon exercise the c... Read More
How to calculate CAPM for emerging markets?
Full Question: Let’s say you’re valuing a company via DCF and so you need to figure out the target company’s cost of equity via CAPM. You’ve selected your comps, almost all of whom are US-based. But you’ve also got a british comp in there, who is a great comp. let’s further assume that ... Read More
Full Question: Let’s say you’re valuing a company via DCF and so you need to figure out the target company’s cost of equity via CAPM. You’ve selected your comps, almost all of whom are US-based. But you’ve also got a british comp in there, who is a great comp. let’s further assume that ... Read More
Modeling out working capital
Full Question:
For change in working capital, you use the change in operating expenses. Normally, and what I’ve been taught, is that you use current assets minus current liabilities. Can you explain to me why you would use the change in operating expenses?
Full Question:
For change in working capital, you use the change in operating expenses. Normally, and what I’ve been taught, is that you use current assets minus current liabilities. Can you explain to me why you would use the change in operating expenses?
Treatment of liabilities on the BS (as debt) in an M&A
Full Question:
In determining a total transaction value for an acquisition (Including the stock/cash offer, plus the assumption of long term liabilities and working capital), would all liabilities from the balance sheet be included?
Full Question:
In determining a total transaction value for an acquisition (Including the stock/cash offer, plus the assumption of long term liabilities and working capital), would all liabilities from the balance sheet be included?
RE: Modeling out working capital
Normally with a derivation of the full balance sheet, yes, assets less laibilities. But 30/60 days expenses is not an uncommon estimate for cash flow based business (services firms) since you need to maintain that to pay salary, etc.
Normally with a derivation of the full balance sheet, yes, assets less laibilities. But 30/60 days expenses is not an uncommon estimate for cash flow based business (services firms) since you need to maintain that to pay salary, etc.
Full Question: When calculating free cash flow to equity, we adjust the capex+working capital+depreciation numbers so that it represents only the equity portion. That makes sense because the equity shouldn't be responsible for all the cash outflows of the firm. However, when I think about the physi... Full Question:
When calculating free cash flow to equity, we adjust the capex+working capital+depreciation numbers so that it represents only the equity portion. That makes sense because the equity shouldn't be responsible for all the cash outflows of the firm. However, when I think about the physical cash that's left for equity holders, it's after all capex + working capital etc. is paid out. Again, I can't reconcile the two arguments. Why do we take a percentage of capex + working capital items? Read More