Posts by: Guest 1
Leveraged Buyout Overview: About LBO Overview
Hi there, As usual, I have a couple of questions/validations to make sure I fully understood the concepts here to move on to the Q&D Basic LBO Model course: (1). Is goodwill created only when when we purchase 100% of the target company? What's the relationship between GW creation and the %... Read More
Hi there, As usual, I have a couple of questions/validations to make sure I fully understood the concepts here to move on to the Q&D Basic LBO Model course: (1). Is goodwill created only when when we purchase 100% of the target company? What's the relationship between GW creation and the %... Read More
Share Repurchase
Hi WST, I remember that in the advance financial modeling course that you used the trailing basis for the projected EPS to calculate the company share repurchase. I am just curious why was "trailing EPS" used instead of the projected EPS? Was it because the EPS projection was not complet... Read More
Hi WST, I remember that in the advance financial modeling course that you used the trailing basis for the projected EPS to calculate the company share repurchase. I am just curious why was "trailing EPS" used instead of the projected EPS? Was it because the EPS projection was not complet... Read More
Re: Estimated Taxes
Thanks for the reply. Yes that makes complete sense. I think what threw me off was the fact that my company's provision for taxes has averaged around 2% of pretax income for previous years. I believe they pay the alternative minimum corporate income tax. Also they have enough NOL to offset the e... Read More
Thanks for the reply. Yes that makes complete sense. I think what threw me off was the fact that my company's provision for taxes has averaged around 2% of pretax income for previous years. I believe they pay the alternative minimum corporate income tax. Also they have enough NOL to offset the e... Read More
TEV and negative net debt clarification
I attended both the morning and afternoon sessions yesterday in Chicago. I was reviewing the work we did later in the evening and noticed that two of the retailers used in the template had negative net debt. This resulted in a TEV which was less than the equity value of the company. What is th... Read More
I attended both the morning and afternoon sessions yesterday in Chicago. I was reviewing the work we did later in the evening and noticed that two of the retailers used in the template had negative net debt. This resulted in a TEV which was less than the equity value of the company. What is th... Read More
Options & Shares exercisable vs outstanding
In reviewing some of the materials in the videos and the notes I took, for LBO, M&A, and just normal standalone valuation there seems to be some contradiction in info so if you could please clarify I'd appreciate it and please explain why as to which is the appropriate method. 1) In a standalon... Read More
In reviewing some of the materials in the videos and the notes I took, for LBO, M&A, and just normal standalone valuation there seems to be some contradiction in info so if you could please clarify I'd appreciate it and please explain why as to which is the appropriate method. 1) In a standalon... Read More
data table
I input the data table information for the Advanced LBO Modeling course (right near the end of the final video) but there must have been a mistake because the table is populated by the word Year 1. My problem is that the program won't let me undo what I've done. Whenever I try to change any cell i g... Read More
I input the data table information for the Advanced LBO Modeling course (right near the end of the final video) but there must have been a mistake because the table is populated by the word Year 1. My problem is that the program won't let me undo what I've done. Whenever I try to change any cell i g... Read More
Minority Interest
With reference to LBO Modeling, Suppose a Company has 20% float in the market, while 80% is held by an Investor. - a Private Equity Fund is desirous of purchasing entire shareholding of the Investor (80%) in a Public Limited Company. The Fund is also desirous to acquire through tender offer 50% o... Read More
With reference to LBO Modeling, Suppose a Company has 20% float in the market, while 80% is held by an Investor. - a Private Equity Fund is desirous of purchasing entire shareholding of the Investor (80%) in a Public Limited Company. The Fund is also desirous to acquire through tender offer 50% o... Read More
Diluted Shares Outstanding for Equity Value
I have got a question related to Diluted Shares Outstanding that you may be able to help me with. Why should we include the diluted figures when calculating Market Equity Value for Trading Multiples analysis? Because my interpretation is that when these options or covertibles were excercised the... Read More
I have got a question related to Diluted Shares Outstanding that you may be able to help me with. Why should we include the diluted figures when calculating Market Equity Value for Trading Multiples analysis? Because my interpretation is that when these options or covertibles were excercised the... Read More
Re: Problem with choose and average formulas
That is very helpful. Thank you. I may ask you to verify my COTT model....
That is very helpful. Thank you. I may ask you to verify my COTT model....
Got a quick question for you re OID: am I correct to assume that it works as follows: I borrow $100 from the bank (with a 5 year maturity), but it has a 25% OID. So, I only get $75 in cash. So, my balance sheet would show: 75 increase to cash, 100 debt liability, and 25 current asset of OID. Let'... Got a quick question for you re OID: am I correct to assume that it works as follows:
I borrow $100 from the bank (with a 5 year maturity), but it has a 25% OID. So, I only get $75 in cash. So, my balance sheet would show: 75 increase to cash, 100 debt liability, and 25 current asset of OID. Let's assume that I pay a 8% interest rate on the debt.
The $25 current asset of OID gets amortized on the income statement at $5 per year, and gets included in the total interest expense line item, and is deductible for book purposes.
I pay interest expense of 8% interest rate X $75 of debt that I actually received cash proceeds, and that interest expense runs through the income statement.
Is this correct? If not, what should be changed? I feel especially unsure of whether the 8% interest rate should be multiplied by $75 or $100, but I don't want to doublecount the OID. Read More