Forum Search: capital markets
Re: Liabilities and Interest Expense
First, thanks for the quick response. Let me repeat what I think you said to make sure I've got it straight. First, the only time we really need to worry about excluding debt and debentures that are not IBNS's from liabilities is in certain industries like airlines, real estate, etc., where th... Read More
First, thanks for the quick response. Let me repeat what I think you said to make sure I've got it straight. First, the only time we really need to worry about excluding debt and debentures that are not IBNS's from liabilities is in certain industries like airlines, real estate, etc., where th... Read More
Re: Modeling an Equity Raise (IPO/FO)
Not a stupid question, just an easy one. for IPO, PIPE or other capital raising, you would simply set up some entries: Cash UP Retained Earnings DOWN (for transaction fees) Equity UP You can set up a separate Trx Adj column or for simplicity on "simple" deals, treat as a regular injectio... Read More
Not a stupid question, just an easy one. for IPO, PIPE or other capital raising, you would simply set up some entries: Cash UP Retained Earnings DOWN (for transaction fees) Equity UP You can set up a separate Trx Adj column or for simplicity on "simple" deals, treat as a regular injectio... Read More
Re: TEV and negative net debt clarification
Even after watching the Corporate Valuation video and reading your previous responses, I still feel a bit unclear about Equity Value being greater than Enterprise Value. I think going over my understanding of these topics might help you identify where my confusion lies. Under an 'unlevered' valuat... Read More
Even after watching the Corporate Valuation video and reading your previous responses, I still feel a bit unclear about Equity Value being greater than Enterprise Value. I think going over my understanding of these topics might help you identify where my confusion lies. Under an 'unlevered' valuat... Read More
Re: TEV and negative net debt clarification
You are confusing the concept of Equity Value/Enterprise Value with DCF. WACC is used in the DCF because it is discounting cash flows to the entire firm (vs cost of equity and Equity Value). Once you arrive at your DCF value (TEV as of today), you're done with DCF. No more reference to WACC. Then... Read More
You are confusing the concept of Equity Value/Enterprise Value with DCF. WACC is used in the DCF because it is discounting cash flows to the entire firm (vs cost of equity and Equity Value). Once you arrive at your DCF value (TEV as of today), you're done with DCF. No more reference to WACC. Then... Read More
Distressed Credit Overview - Valuation questions
1. Slide 29 a. Where do bank vs bonds fall in this cap structure diagram (unclear) b. Senior debt i. Even though it has a 1st or 2nd lien on assets, is it always considered “unsecured” and not “secured”? why – i... Read More
1. Slide 29 a. Where do bank vs bonds fall in this cap structure diagram (unclear) b. Senior debt i. Even though it has a 1st or 2nd lien on assets, is it always considered “unsecured” and not “secured”? why – i... Read More
Re: Distressed Credit Overview - Valuation questions
1) Capital Structure a) Bank debt usually falls on the top box, Senior Debt (Revolver and Term Loans) b) Senior Debt can be secured OR unsecured. Nothing to do with SPV at all. Correct, Senior Debt usually does include bank debt and not usually bonds, especially the way we are listing it here. 2) V... Read More
1) Capital Structure a) Bank debt usually falls on the top box, Senior Debt (Revolver and Term Loans) b) Senior Debt can be secured OR unsecured. Nothing to do with SPV at all. Correct, Senior Debt usually does include bank debt and not usually bonds, especially the way we are listing it here. 2) V... Read More
Re: Distressed Credit Overview - Valuation questions
Thanks. Further clarification on 1 (a) and (b): 1- So to clarify, the Green box can include secured and unsecured debt? What classifies a piece of debt in the Blue box (Senior Secured Debt) and not the Green Box (Senior Debt) – can you give an example please? Are securitizations excluded from ... Read More
Thanks. Further clarification on 1 (a) and (b): 1- So to clarify, the Green box can include secured and unsecured debt? What classifies a piece of debt in the Blue box (Senior Secured Debt) and not the Green Box (Senior Debt) – can you give an example please? Are securitizations excluded from ... Read More
adv lbo model questions
a bunch of questions in the advanced lbo model. Sources and uses: uses: this is likely a stock (not asset) purchase (as debt is refi'd/purchased/needs to be taken care of...)? what is the equity prem based from? if co has lot of cash, them would this affect eq prem? don't see cash or min int in u... Read More
a bunch of questions in the advanced lbo model. Sources and uses: uses: this is likely a stock (not asset) purchase (as debt is refi'd/purchased/needs to be taken care of...)? what is the equity prem based from? if co has lot of cash, them would this affect eq prem? don't see cash or min int in u... Read More
Re: adv lbo model questions
Sources & Uses: - from the Merger courses, the legal structure can be stock or asset (most likely stock for an LBO, but not necessarily) - regardless of stock vs asset deal, debt refi'ed, etc is same treatment: you are buying the entire company - equity premium: based on appropriate valuation of... Read More
Sources & Uses: - from the Merger courses, the legal structure can be stock or asset (most likely stock for an LBO, but not necessarily) - regardless of stock vs asset deal, debt refi'ed, etc is same treatment: you are buying the entire company - equity premium: based on appropriate valuation of... Read More
This topic of leases (capital and operating) is covered extensively in our Private Company Valuation course: http://www.wstselfstudy.com/privateval.html Feel free to use elearning discount code for 10% off... This topic of leases (capital and operating) is covered extensively in our Private Company Valuation course:
http://www.wstselfstudy.com/privateval.html
Feel free to use elearning discount code for 10% off
In short, this is only relevant for industries with significant buy vs lease decisions (airlines, real estate, etc).
Regarding your clarification on other debt - our point was simply to state that the financial definition of "debt" does NOT include liabilities such as accounts payable, accrued liabilities, etc, which the accountants do consider. No need to overthink this one. Only material discussion point beyond that is the inclusion or exclusion of leases as debt. the interest expense will still be inclusive of leases; we don't bother backing it out. Read More