Forum Search: capital markets
Corporate Valuation: 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: 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: Corporate Valuation: capital lease
Hi, in the valuation methodologies video it is mentioned that capital leases should not be added to debt because they could be considered operating leases. In the previous reply, however, it is mentioned that "rating agnecies always add back leases, both operating and capital". What is the correc... Read More
Hi, in the valuation methodologies video it is mentioned that capital leases should not be added to debt because they could be considered operating leases. In the previous reply, however, it is mentioned that "rating agnecies always add back leases, both operating and capital". What is the correc... Read More
RE: Corporate Valuation: capital lease
Please view our forums on capital leases at www.wallst-training.com/forum
Please view our forums on capital leases at www.wallst-training.com/forum
10 Unanswered complex LBO questions
Hi, I have several quick qualitative questions: 1. In the debt sweep, I would imagine that if we get new debt, that new debt would become labeled as next year's existing debt. But we seem to be treating new debt and existing debt as different tranches. Why is this? What's the point of calling ... Read More
Hi, I have several quick qualitative questions: 1. In the debt sweep, I would imagine that if we get new debt, that new debt would become labeled as next year's existing debt. But we seem to be treating new debt and existing debt as different tranches. Why is this? What's the point of calling ... Read More
Multiples & WACC class
Hi, (1). When calculating the D/E ratios for WACC, we are grabbing a “Total Debt” figure that includes M.I. (of course for the companies that have it). Don’t you think this is not appropriate and in some sense overstate the D/E ratio (forgetting about the relevance of the amounts and to be ... Read More
Hi, (1). When calculating the D/E ratios for WACC, we are grabbing a “Total Debt” figure that includes M.I. (of course for the companies that have it). Don’t you think this is not appropriate and in some sense overstate the D/E ratio (forgetting about the relevance of the amounts and to be ... Read More
RE: Tr Comps overview questions
1) We use marginal tax rate b/c any additional new income is taxed at that (usually) higher rate rather than effective rate. If there is a progressive tax system in place or other tax credits that reduce (or increase) the tax rate, you don't want that distortion in there. 2) It depends on what co... Read More
1) We use marginal tax rate b/c any additional new income is taxed at that (usually) higher rate rather than effective rate. If there is a progressive tax system in place or other tax credits that reduce (or increase) the tax rate, you don't want that distortion in there. 2) It depends on what co... Read More
RE: Complex Trading Comps Analysis: COST Inputs
1) You helped our argument for us - because this is subjective, you CANNOT introduce (well we'll try not to introduce) subjectivity. Who is to argue what direction the stock price will take? WMT's stock price was in a $45-$50 band for 8 years, so who's to say that suddenly COST or anyone's stock pri... Read More
1) You helped our argument for us - because this is subjective, you CANNOT introduce (well we'll try not to introduce) subjectivity. Who is to argue what direction the stock price will take? WMT's stock price was in a $45-$50 band for 8 years, so who's to say that suddenly COST or anyone's stock pri... Read More
RE: Accounting changes
First of all, Changes in Accounting Principles that are below Net Income or Income from Continuing Operations never get touched. Second, again, use judgement - will this occur again in the future? For instance, don't make adjustments for SBC - Stock Based Compensation b/c that is a new pronouncem... Read More
First of all, Changes in Accounting Principles that are below Net Income or Income from Continuing Operations never get touched. Second, again, use judgement - will this occur again in the future? For instance, don't make adjustments for SBC - Stock Based Compensation b/c that is a new pronouncem... Read More
If you are a buyer and evaluating a potential target, and now you have the target's standalone Free Cash Flow. For DCF valuation, is it right to apply the buyer's's WACC to the free cash flow, with the logic that the buyer should value how much the cash flow worth to it using its own cost of capital... If you are a buyer and evaluating a potential target, and now you have the target's standalone Free Cash Flow. For DCF valuation, is it right to apply the buyer's's WACC to the free cash flow, with the logic that the buyer should value how much the cash flow worth to it using its own cost of capital?
If this is not the case and the target's own WACC should apply, then does it mean that the DCF valuation using target's WACC is same to all potential buyers? In other word, does the target's free cash flow worth same to different buyers with different WACCs, or costs of capital? Read More