Forum Search: capital markets
Re: Overview of the Financial Markets
Wealth Management, while not as directly related to the markets as some other functions, could be considered very similar to the Asset Management side. For instance, WM comprises a substantial portion of demand for securities such as stocks, whether they're individual companies or sectors. Their cli... Read More
Wealth Management, while not as directly related to the markets as some other functions, could be considered very similar to the Asset Management side. For instance, WM comprises a substantial portion of demand for securities such as stocks, whether they're individual companies or sectors. Their cli... Read More
Overview of the Financial Markets
How does Wealth Management fit into the big picture of the financial markets?
How does Wealth Management fit into the big picture of the financial markets?
Re: capital lease in TEV
We would exclude capital leases from TEV calculations in vast majority of cases. Nuances are explained in the Private Company Valuation and Valuation Nuances course - so don't leave those exceptions out! In the cases of excluding capital leases from TEV, EBITDA does not need to be further adjuste... Read More
We would exclude capital leases from TEV calculations in vast majority of cases. Nuances are explained in the Private Company Valuation and Valuation Nuances course - so don't leave those exceptions out! In the cases of excluding capital leases from TEV, EBITDA does not need to be further adjuste... Read More
Re: Questions on the slides (8 questions)
Hi Thank you for the reply, they are very helpful! Hope you had a good weekend! Wanted to follow up your response to 7a-c, if I understand you correctly, 1. Lever & unlever of beta of comps and calculating of tax effected cost of debt: a. use marginal tax rate instead of effective tax... Read More
Hi Thank you for the reply, they are very helpful! Hope you had a good weekend! Wanted to follow up your response to 7a-c, if I understand you correctly, 1. Lever & unlever of beta of comps and calculating of tax effected cost of debt: a. use marginal tax rate instead of effective tax... Read More
Re: Questions on the slides (8 questions)
1) Yes, include kp because it is part of funding costs of capital structure 2) Preferred typically is more expensive than debt and less than equity; in terms of valuation, treat it like debt, subtracting it out of TEV to arrive at equity. Throw in value of any converts or warrants for all-in return... Read More
1) Yes, include kp because it is part of funding costs of capital structure 2) Preferred typically is more expensive than debt and less than equity; in terms of valuation, treat it like debt, subtracting it out of TEV to arrive at equity. Throw in value of any converts or warrants for all-in return... Read More
Questions on the slides (8 questions)
1. Do you always have to include cost of preferred equity in WACC? In which case you MUST include cost of preferred equity? 2. Since preferred equity is closer to debt, does that mean cost of debt < cost of preferred equity < cost of equity? How do you calculate the returns and valuation multiple... Read More
1. Do you always have to include cost of preferred equity in WACC? In which case you MUST include cost of preferred equity? 2. Since preferred equity is closer to debt, does that mean cost of debt < cost of preferred equity < cost of equity? How do you calculate the returns and valuation multiple... Read More
Re: Relationship between P/E and inverse of P/E (2 questions)
1a) Inverse of PE is indeed Earnings Yield. It is NOT cost of equity because cost of equity is typically derived from CAPM whereas PE and Earnings Yield can be thought of as a "market-driven" or "market-demanded" cost of equity. Therefore it WOULD be appropriate to say that Earnings Yield is essenti... Read More
1a) Inverse of PE is indeed Earnings Yield. It is NOT cost of equity because cost of equity is typically derived from CAPM whereas PE and Earnings Yield can be thought of as a "market-driven" or "market-demanded" cost of equity. Therefore it WOULD be appropriate to say that Earnings Yield is essenti... Read More
Re: gordon growth number
1) Yes, because your model explicitly implicitly includes the impact of inflation (see your other post), the growth rate used for Gordon Growth should be compared against GDP NOMINAL 2) Not sure "if yes, add inflation". If yes, that would be double counting inflation, no? 3) Yes, per previous ... Read More
1) Yes, because your model explicitly implicitly includes the impact of inflation (see your other post), the growth rate used for Gordon Growth should be compared against GDP NOMINAL 2) Not sure "if yes, add inflation". If yes, that would be double counting inflation, no? 3) Yes, per previous ... Read More
Relationship between P/E and inverse of P/E (2 questions)
Hi! First, awesome videos! Follow up questions on multiples, esp for listed companies valuation when analysing a stock in a long short fund context: 1. Is inverse of P/E = earnings yield = cost of equity? I was looking through this link and it states that this statement is wrong ie inverse o... Read More
Hi! First, awesome videos! Follow up questions on multiples, esp for listed companies valuation when analysing a stock in a long short fund context: 1. Is inverse of P/E = earnings yield = cost of equity? I was looking through this link and it states that this statement is wrong ie inverse o... Read More
Hi there,
Why is it that capital gains are not mentioned in the equations for the Gordon Growth Model and No Growth Model?
Thanks!