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RE: Deal Comps Analysis: Quick model formatting question
For the adjustments for normalizing, can we have a separate support page (in addition to commenting) with adjust EBIT, adjust EPS, and adjust net income columns? Or is this just out of the norm?

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by Guest 1.

added 11 years ago

RE: Deal Comps Analysis: Quick model formatting question
Yes you can, however, when you update comps regularly, that is too much work. Normally we just show the output.

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by WST Expert 1.

added 11 years ago

Deal Comps Analysis: Deal Info Source?
Hi,

Would I be correct in saying that the deal info source (besides the bloomberg printouts) are from the 8K? If not, where is it from?

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by Guest 1.

added 11 years ago

RE: Deal Comps Analysis: Deal Info Source?
Yes you can, however, when you update comps regularly, that is too much work. Normally we just show the output.

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by WST Expert 1.

added 11 years ago

RE: Deal Comps Analysis: Deal Info Source?
Or rather, there seems to be a .txt file between the bloomberg printouts and the 8K in some of the notes. Would this be a PR, or something else?

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by Guest 1.

added 11 years ago

RE: Deal Comps Analysis: Deal Info Source?
the .txt files were Press Releases, correct.

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by WST Expert 1.

added 11 years ago

RE: WACC question
great question! the convention is to use the target's wacc b/c you are figuring out the standalone target's run-rate, going-concern valuation and thus, that does not involve the acquiror at all, even if you are doing the DCF in an acquisition context. in reality, you will sensitize your DCF analysis... Read More

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by WST Expert 1.

added 11 years ago

Complex Trading Comps Analysis: COST Inputs
Hi, (1). Sorry, but I still don’t see logic and consistence in the converts explanation. We are analyzing the convertibility of the security as of TODAY, and in my view, and as also expressed in a previous post here, as of TODAY, it is in-the-money, and as such, should assume conversion (as the... Hi,

(1). Sorry, but I still don’t see logic and consistence in the converts explanation. We are analyzing the convertibility of the security as of TODAY, and in my view, and as also expressed in a previous post here, as of TODAY, it is in-the-money, and as such, should assume conversion (as the basic rule for dilutive securities). So, WST argues that if the maturity was tomorrow or the share price drops tomorrow a investor would not convert – but for me, in essence, it is a subjective thinking (one cannot be imagining if something was tomorrow what would have happened…) We are analyzing it as of TODAY and have to decide to convert it or not based on what we have TODAY (Present Value and current share price).

(2). So, repeating the question of a previous post (that I’m not sure was answered in full), why is the future value (i.e., face value) of convertibles compared to the market value of shares? (since we actually need to compare Present Value vs. Present Value and Future Value vs. Future Value)?

(3). Independently of the different points of view, what should we consider in terms of numbers, to decide if it is in-the-money or out-the-money: PV of Convertibles (as stated on BS) vs. market value of equivalent shares, or Face Value of Convertibles (the FV/par value) vs. market value of equivalent shares?

(4). If converted, the adjustments would be:

A. Reduce debt by the amount stated on the BS (PV of face value)
B. Increase book value of equity by the equivalent number of shares converted x current stock price
C. Add the equivalent number of shares to the basic shares Outstanding

Am I missing any adjustment here?

(5). Also, Could you please confirm if the new book value of equity should be increased by the amount of book value of the convertible bonds (now excluded from debt on the BS) or by the market value of the equivalent number of shares (current stock price x equivalent number of shares that were converted)?

(6). Sorry, but in the previous answer WST mentioned that “what costco shares suddenly dropped the next day? then it is suddenly out of the money and one wouldn't convert;” – it is the sane thing for options – one can wait and decide to convert the options until it expires because may believe the share price can go up. And anyway we convert it, because our analysis is as of TODAY and does not include the subjective factor of thinking in the “timing” of this and that. It seems to me by assuming this for the converts, we are adopting two different criteria for the same thing. Does that make sense for you guys?

I appreciate your help in these questions.
Thanks again.

Cheers. Read More

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by Guest 1.

added 11 years ago

10 Unanswered complex LBO questions
Hi, I have several quick qualitative questions: 1. In the debt sweep, I would imagine that if we get new debt, that new debt would become labeled as next year's existing debt. But we seem to be treating new debt and existing debt as different tranches. Why is this? What's the point of calling ... Read More

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by Guest 1.

added 11 years ago

RE: Tr Comps overview questions
1) We use marginal tax rate b/c any additional new income is taxed at that (usually) higher rate rather than effective rate. If there is a progressive tax system in place or other tax credits that reduce (or increase) the tax rate, you don't want that distortion in there. 2) It depends on what co... Read More

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by WST Expert 1.

added 11 years ago

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