Posts by: Eric Y

Adv LBO Modeling TL Logic
Hello, I'm currently looking at the super advanced LBO model and I'm trying to understand the logic on the Term Loan Borrowing / Paydown line. Can you please explain what the formula is about? How can you draw on a TL? The formula looks very similar to a Revolver Borrowing / Paydown line. Your el... Read More
Go to post added 4 years ago
Perpetuity Growth Method
Why do we use tax effected EBIT instead of using unlevered free cash flow to calculate TEV when trying to back solve implied ebitda multiple in a DCF? Thank you
Go to post added 8 years ago
Reverse Morris Trust (RMT)
I have a question regarding this type of M&A structure. What is the profile of the acquirer and target that makes this work, what makes it not work? Why would a company choose this structure over others out there and what are the key financial/valuation metrics to focus on to determine whether a RMT... Read More
Go to post added 9 years ago
Re: Synergies/(Cushion) to break even
I think I understand the synergies part of the translation. Though, when you say cushion or buffer, can you basically say "this is the amount of loss I can take from the transaction before it is neither accretive or dilutive to my earnings?" I'm not sure if "loss" is that right word, but if not how ... Read More
Go to post added 9 years ago
Synergies/(Cushion) to break even
I just have a conceptual question on synergies and cushion to break even in an accretion dilution model. What does a positive number (synergies) to break even mean and what does a negative number (cushion) to break even mean? Does this mean that I will need X $ of synergies to make up for the premiu... Read More
Go to post added 9 years ago
Risk Free Rate (what to use)
Often times, we are asked to use a risk free rate for the CAPM. I have always been told to use the 10 year Treasury bond for the RFR, what is the proper rate to use and why?
Go to post added 9 years ago
Re: Minimum Cash Balance
Ok thank you.
Go to post added 9 years ago
Re: Minimum Cash Balance
Ok that's what I had figured. Is there any other scenarios when cash would be a use of funds?
Go to post added 9 years ago
Re: Minimum Cash Balance
Can it ever be a use of funds? What if hypothetically, a company has 0 cash, but during an LBO a minimum cash balance was established. Wouldn't a minimum cash balance in this case be a "use of cash?"
Go to post added 9 years ago
Minimum Cash Balance
Do we put the minimum cash balance as a use of fund as well (in addition to source of fund)? Please explain thank you.
Go to post added 9 years ago