Forum Search: capital markets
Re: WACC of a private company?
If BOTH the target company AND the industry have little to no debt, then it's hard to make a case that debt is a big part of the capital structure. As such, go with the actual or the industry (round to 5%). Also, WACC is as of a point in time. Since your DCF value is as of a point in time as well,... Read More
If BOTH the target company AND the industry have little to no debt, then it's hard to make a case that debt is a big part of the capital structure. As such, go with the actual or the industry (round to 5%). Also, WACC is as of a point in time. Since your DCF value is as of a point in time as well,... Read More
CLOSING aDJUSTMENT
Hello, I had done a valuation for a buy-side transaction based on discounting free cash flows to firm. Now, five months later we are trying to close the transaction. However, many things have changed in the company including cash balance, debt level, and working capital. Also, during this period o... Read More
Hello, I had done a valuation for a buy-side transaction based on discounting free cash flows to firm. Now, five months later we are trying to close the transaction. However, many things have changed in the company including cash balance, debt level, and working capital. Also, during this period o... Read More
Re: CLOSING aDJUSTMENT
If you don't have a term sheet, letter of intent or purchase price agreement (even if all in draft format), then nothing you can do about it. Go update your valuation reflecting the new balance sheet amounts and above all, don't mess up the TEV vs Equity Value on the capital structure - you can lose... Read More
If you don't have a term sheet, letter of intent or purchase price agreement (even if all in draft format), then nothing you can do about it. Go update your valuation reflecting the new balance sheet amounts and above all, don't mess up the TEV vs Equity Value on the capital structure - you can lose... Read More
Re: CLOSING aDJUSTMENT
I don't understand why it is okay to adjust the price based on working capital movement and loans but not on dividends. May be I'm missing something. Also, in case of the working capital and loan adjustment.. can you please elaborate alittle bit on the adjustment formula that should be used. Thank... Read More
I don't understand why it is okay to adjust the price based on working capital movement and loans but not on dividends. May be I'm missing something. Also, in case of the working capital and loan adjustment.. can you please elaborate alittle bit on the adjustment formula that should be used. Thank... Read More
Re: CLOSING aDJUSTMENT
Dividends (or lack of dividends) are already reflected in the capital structure, from the Cash portion of Net Debt. Thus, if there's excess cash available, then it already increases the Equity Value that the sellers get. Working Capital adjustments are usually minor and supposedly already incorporat... Read More
Dividends (or lack of dividends) are already reflected in the capital structure, from the Cash portion of Net Debt. Thus, if there's excess cash available, then it already increases the Equity Value that the sellers get. Working Capital adjustments are usually minor and supposedly already incorporat... Read More
Emerging Markets
During the LBO class discussion, it wasn't clear to me what the recommended treatment for adjustment for valuing an emerging market company. Are you saying to use not the US risk free rate and therefore adjust for the country specific rate, adjust the market risk premium, or adjust to the total numb... Read More
During the LBO class discussion, it wasn't clear to me what the recommended treatment for adjustment for valuing an emerging market company. Are you saying to use not the US risk free rate and therefore adjust for the country specific rate, adjust the market risk premium, or adjust to the total numb... Read More
Re: Emerging Markets
This is a much longer discussion that cannot be answered in a post. This is covered quite extensively with all the available options and full discussion of pros and cons in our Private Company Valuation Course: http://w... Read More
This is a much longer discussion that cannot be answered in a post. This is covered quite extensively with all the available options and full discussion of pros and cons in our Private Company Valuation Course: http://w... Read More
Re: WACC for a Private Equity Firm
You bring up a good point; however, if you're investment horizon is three years, then you would compare the "IRR" of the investment against the private equity firm's cost of capital to evaluate the "invest or not" decision. The concept of WACC and using 10-yr UST (originally 20-... Read More
You bring up a good point; however, if you're investment horizon is three years, then you would compare the "IRR" of the investment against the private equity firm's cost of capital to evaluate the "invest or not" decision. The concept of WACC and using 10-yr UST (originally 20-... Read More
Advance Financial Modeling- Core Model Questions on CF
Hi, In the Cash Flow Statement, the model included Other assets and Deferred Charges in the changes in working capital calculation. From my other studies, I learnt working captial only included current asset and current liability, however, other assets and deferred charges is under long term asset... Read More
Hi, In the Cash Flow Statement, the model included Other assets and Deferred Charges in the changes in working capital calculation. From my other studies, I learnt working captial only included current asset and current liability, however, other assets and deferred charges is under long term asset... Read More
All your questions are addressed in our M&A Deal Structuring course. please go to: www.wstselfstudy.com and click on Courses & Programs. Short Answer to your question: 1) AT&T is going to pay $25B in cash (ca... All your questions are addressed in our M&A Deal Structuring course.
please go to: www.wstselfstudy.com and click on Courses & Programs.
Short Answer to your question:
1) AT&T is going to pay $25B in cash (cash down on their BS) and issue $14B of stock to existing shareholders, DT & public stub (equity up on their BS).
Actual impact to BS will be according to Purchase Price Allocation, covered in our Intermediate Merger Modeling class. Impossible to summarize here.
Beyond Goodwill issues, you have FMV allocation will be extensive due to hard assets.
2) Correct, new stock issuance to existing shareholders. Won't go through public markets. DT doesn't own 100% of T-Mobile, which is also publicly traded. So 8% represents the DT % of T-Mobile on $14B.
3) Take our valuation class. AT&T isn't overpaying. But this will be a disaster. Read More