Forum Search: capital markets
Re: DCF - can you project with a change in capital structure
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Hello, if you don't see the course in your login it means that you did not purchase access to that module. If you click on ORDER MORE on the upper right main menu bar when you are logged in, you can order that course to have it added to your account.
Re: DCF - can you project with a change in capital structure
thank you! very helpful
I don't see distressed course under self-study module, would you be able to make that available? It will be very helpful! :) thank you!
thank you! very helpful
I don't see distressed course under self-study module, would you be able to make that available? It will be very helpful! :) thank you!
Re: measuring capital charge
We love Damodaran, but sometimes his approach is still academic and not real world. In cases of firms with a "rent vs. buy" decision that is related to COGS, mostly transport companies, such as airlines or rental cars, indeed we look at EBITDAR instead of EBITDA and our "Adjusted Enterprise Value... Read More
We love Damodaran, but sometimes his approach is still academic and not real world. In cases of firms with a "rent vs. buy" decision that is related to COGS, mostly transport companies, such as airlines or rental cars, indeed we look at EBITDAR instead of EBITDA and our "Adjusted Enterprise Value... Read More
Re: DCF - can you project with a change in capital structure
1) Yes and no. DCF does not assume capital structure constant. You are using latest available capital structure for DCF because DCF is as of a specific point in time since you are discounting both the FCFF and TV to today. Hence, you use latest available figures. 2) By virtual of debt repayments ... Read More
1) Yes and no. DCF does not assume capital structure constant. You are using latest available capital structure for DCF because DCF is as of a specific point in time since you are discounting both the FCFF and TV to today. Hence, you use latest available figures. 2) By virtual of debt repayments ... Read More
measuring capital charge
Hi from the course, I see that you are using total capital to calculate capital charge. I was reading up on Damodaran's explanation on this as well and don't understand that, can you elaborate? "In cases where firms alter their capital invested through their operating decisions (for example, by usin... Read More
Hi from the course, I see that you are using total capital to calculate capital charge. I was reading up on Damodaran's explanation on this as well and don't understand that, can you elaborate? "In cases where firms alter their capital invested through their operating decisions (for example, by usin... Read More
DCF - can you project with a change in capital structure
Hi When pitching a stock for long/short funds: 1. Say the company has debt repayment schedule, in addition to using trading comps, I thought of using DCF as a sanity check or to extrapolate a few data points for valuation. Say the management announced debt repayment schedule in the next few yea... Read More
Hi When pitching a stock for long/short funds: 1. Say the company has debt repayment schedule, in addition to using trading comps, I thought of using DCF as a sanity check or to extrapolate a few data points for valuation. Say the management announced debt repayment schedule in the next few yea... Read More
Re: Projection of FX translation
Gotcha. (i) How about if you are trying to project a company whose 50% of revenue comes from international market (say more than 2 international markets) and 50% from the US. Given significant portion of revenue from overseas, is there a need to project FX effect into the model? If so, how to do... Read More
Gotcha. (i) How about if you are trying to project a company whose 50% of revenue comes from international market (say more than 2 international markets) and 50% from the US. Given significant portion of revenue from overseas, is there a need to project FX effect into the model? If so, how to do... Read More
Re: Purpose of Column O in value tab
Please continue to watch the videos to understand the logic. In short, we are going to sensitize the figures in Column N and ask the question of "What happens when the valuation is wrong?" There will be stakeholders who get greater than 100% recovery - we're teaching you how to evaluate capital stru... Read More
Please continue to watch the videos to understand the logic. In short, we are going to sensitize the figures in Column N and ask the question of "What happens when the valuation is wrong?" There will be stakeholders who get greater than 100% recovery - we're teaching you how to evaluate capital stru... Read More
Re: Seasonal Working Capital
If I'm the seller and you want a greater working capital requirement (i.e. deduction to purchase price), then I would respond and say, ok I spent all that money and I don't get the benefit of that once you presumably sell the inventory during Q4. If I'm the acquiror, I'd make the opposite case s... Read More
If I'm the seller and you want a greater working capital requirement (i.e. deduction to purchase price), then I would respond and say, ok I spent all that money and I don't get the benefit of that once you presumably sell the inventory during Q4. If I'm the acquiror, I'd make the opposite case s... Read More
Just to add to this, when you remove shares from the market by issuing debt, you are adding more leverage to the capital structure of the company which increases the company's cost of equity. In an M&M world this increase in cost of equity would exactly offset the benefit from adding lower cost deb... Just to add to this, when you remove shares from the market by issuing debt, you are adding more leverage to the capital structure of the company which increases the company's cost of equity. In an M&M world this increase in cost of equity would exactly offset the benefit from adding lower cost debt financing to the capital structure. If we assume taxes are deductible, however, then the true economic value from a share repurchase should be equal to the incremental tax shield created from altering the capital structure. This also assumes you are buying the shares back at a fair value. If shares are trading below intrinsic value, this would also create value. Do you agree with this assessment? Read More