Forum Search: capital markets
RE: Accounting: ROC
Add interest expense! The idea is that you calculate the returns that capita contributors receive. Net income goes to equity stakeholders and interest expense goes to debt holders, so the total return that all capital holders receive is net income + interest expense over equity+debt Join our ... Read More
Add interest expense! The idea is that you calculate the returns that capita contributors receive. Net income goes to equity stakeholders and interest expense goes to debt holders, so the total return that all capital holders receive is net income + interest expense over equity+debt Join our ... Read More
RE: Finance 101: DDM?
1) IRR will give you the rate of return on a series of cash flows. NPV will give you the net present value of a series of cash flows. IRR by definition is the rate that sets NPV to be zero. So the IRR of a cash flow series can be positive and NPV can be negative if the discount rate (an input into N... Read More
1) IRR will give you the rate of return on a series of cash flows. NPV will give you the net present value of a series of cash flows. IRR by definition is the rate that sets NPV to be zero. So the IRR of a cash flow series can be positive and NPV can be negative if the discount rate (an input into N... Read More
Corporate Valuation Methodologies: capital lease
Hi About the capital lease, the instructor mentioned in the lecture, his view of capital lease is not very positive, it shows more debt, less efficient for the asset turnover ratios, however, capitalized also means future depreciation, you can get the tax deduction for the capital lease, perhaps ... Read More
Hi About the capital lease, the instructor mentioned in the lecture, his view of capital lease is not very positive, it shows more debt, less efficient for the asset turnover ratios, however, capitalized also means future depreciation, you can get the tax deduction for the capital lease, perhaps ... Read More
RE: Corporate Valuation Methodologies: capital lease
Correct points and observations but operating leases are also tax deductible. Of course there is the whole timing difference of depreciation and interest but putting that aside, the more significant figure is the entire amount that is off balance sheet vs on balance sheet. Keep in mind rating agneci... Read More
Correct points and observations but operating leases are also tax deductible. Of course there is the whole timing difference of depreciation and interest but putting that aside, the more significant figure is the entire amount that is off balance sheet vs on balance sheet. Keep in mind rating agneci... Read More
RE: Company Profiles: Questions about slides
Total capital includes all sources of capital - primarily debt and equity. You don't include cash because after you raise the $ from debt and equity, you get cash. However, for valuation and TEV purposes you use net debt to arrive at equity value, or the residual value to owners which is net of ... Read More
Total capital includes all sources of capital - primarily debt and equity. You don't include cash because after you raise the $ from debt and equity, you get cash. However, for valuation and TEV purposes you use net debt to arrive at equity value, or the residual value to owners which is net of ... Read More
RE: AFM Core Model: Current Portion of LT Debt
Keep in mind that commercial paper is split out separately. Our assumptiom says no change in CP- so no borrowing or paydown. However if there was a paydown, we would consider it as part of your required repayment. In reality there is a paydown of CP since it is short term debt for working capital pu... Read More
Keep in mind that commercial paper is split out separately. Our assumptiom says no change in CP- so no borrowing or paydown. However if there was a paydown, we would consider it as part of your required repayment. In reality there is a paydown of CP since it is short term debt for working capital pu... Read More
AFM Enhancements: Valuation Question
My name is Jennifer Shi, a colleague of Nadia Sandi. We work in International Finance Corporation of the World Bank. We are currently reviewing the training modules. I have a real life valuation question. Appreciate your guidance. We are using DCF to value an existing equity investment. T... Read More
My name is Jennifer Shi, a colleague of Nadia Sandi. We work in International Finance Corporation of the World Bank. We are currently reviewing the training modules. I have a real life valuation question. Appreciate your guidance. We are using DCF to value an existing equity investment. T... Read More
RE: AFM Enhancements: Valuation Question
Just relized that you have already responded to my question. A follow up question: if we know for sure that the capital increase is to happen, like you suggested, we model out the company as a going concern with all known facts. I think we should calculate the valuation of our current holding by m... Read More
Just relized that you have already responded to my question. A follow up question: if we know for sure that the capital increase is to happen, like you suggested, we model out the company as a going concern with all known facts. I think we should calculate the valuation of our current holding by m... Read More
RE: AFM Enhancements: Valuation Question
Correct, you would use your diluted ownership %age after the "certain and known" anticipated capital raising.
Correct, you would use your diluted ownership %age after the "certain and known" anticipated capital raising.
The "interest" used in Return on Capital formula is the "interest expense". Here is my explanation; Capital of the company will come either from the debt holders or the shareholders. As we are trying to find out the return on capital, we have to take into consideration the return for both t... The "interest" used in Return on Capital formula is the "interest expense".
Here is my explanation;
Capital of the company will come either from the debt holders or the shareholders.
As we are trying to find out the return on capital, we have to take into consideration the return for both types of capital.
For equity holders the return is income, for debtholders the return is the interest that they get from the company. We simply add these two to find the total return on company's total capital.
Just divide it with the total capital
And voila, here is our ROC!!! Read More