Forum Search: capital markets
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
Re: Advance Financial Modeling- Core Model Questions on CF
Generally speaking, you will go with the company's classification of working capital, as they know best what is inside each line item. This can clearly be ascertained by looking at their CFO on the Cash Flow Statement to see where they placed the items. THey are usually grouped together with some so... Read More
Generally speaking, you will go with the company's classification of working capital, as they know best what is inside each line item. This can clearly be ascertained by looking at their CFO on the Cash Flow Statement to see where they placed the items. THey are usually grouped together with some so... Read More
WACC : Historical Beta Values
Could someone please enlighten me as to what databases exist for historical beta values (say past 5 yrs.)for companies?Which databases are considered most reliable? Also we use peers to find an average unlevered beta value and then lever it to the capital structure of the target company. Is there a... Read More
Could someone please enlighten me as to what databases exist for historical beta values (say past 5 yrs.)for companies?Which databases are considered most reliable? Also we use peers to find an average unlevered beta value and then lever it to the capital structure of the target company. Is there a... Read More
Re: WACC : Historical Beta Values
Q1) Bloomberg should be able to handle that easily. Go to Ticker <EQUITY> Beta and you can customize date range and periodicity. Most other financial database vendors should also be able to handle. Q2) it's really not that hard. Our online course, Advanced Financial Modeling - Enhancements to... Read More
Q1) Bloomberg should be able to handle that easily. Go to Ticker <EQUITY> Beta and you can customize date range and periodicity. Most other financial database vendors should also be able to handle. Q2) it's really not that hard. Our online course, Advanced Financial Modeling - Enhancements to... 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... 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 a ton of money getting it wrong.
Whatever your new valuation number is, that's the new starting point for negotiations.
Usually, purchase price adjustments are for stuff like working capital changes and deductions for shareholder loans,etc.
A significant change in cash and large dividends affect valuation directly, not purchase price adjustments. Read More