Posts by: Guest 1
Levered vs. unlevered beta for cost of equity
My question relates to the appropriate use of levered vs. unlevered beta in deriving the cost of equity in a free cash flow to the firm and free cash flow to equity analysis. I have read conflicting information on the subject. Is it appropriate to use unlevered beta to calculate the cost of ... Read More
My question relates to the appropriate use of levered vs. unlevered beta in deriving the cost of equity in a free cash flow to the firm and free cash flow to equity analysis. I have read conflicting information on the subject. Is it appropriate to use unlevered beta to calculate the cost of ... Read More
Valuation - IRR
Do any of the self study courses include calculating the IRR of a transaction, I have taken the Core model and am now taking the enhancements course. The enhancements does do a NPV, but I am also working on a few private equity investments that require an IRR calculation. This is easily done, with E... Read More
Do any of the self study courses include calculating the IRR of a transaction, I have taken the Core model and am now taking the enhancements course. The enhancements does do a NPV, but I am also working on a few private equity investments that require an IRR calculation. This is easily done, with E... Read More
Re: Problem with choose and average formulas
Sorry, one more question: Once I cleared up the first circ problem, is was fine with the 1 but as you say there was still a cir when I switched it to 2. What then is the value of doing the choose 1 or 2 on beginning versus average balance if the average balance forumla is always going to be flawed? ... Read More
Sorry, one more question: Once I cleared up the first circ problem, is was fine with the 1 but as you say there was still a cir when I switched it to 2. What then is the value of doing the choose 1 or 2 on beginning versus average balance if the average balance forumla is always going to be flawed? ... Read More
Re: Minority Interest
OK. It is clear now that for purchase accounting, no proportionate consolidation. Now in the LBO Summary tab of the model (a) In "Uses of Funds", to calculate "Purchase Equity" I have multiplied share price by total number of outstanding shares irrespective that I am buying 90%... Read More
OK. It is clear now that for purchase accounting, no proportionate consolidation. Now in the LBO Summary tab of the model (a) In "Uses of Funds", to calculate "Purchase Equity" I have multiplied share price by total number of outstanding shares irrespective that I am buying 90%... Read More
Deferred Acquisition Costs for Life Insurance Companies
I am trying to value diversified insurance companies using market multiples. When you have the "amortization of deferred policy acquisition costs" for life insurers, should I treat it as a cash expense, not as a non-cash amortization charge it ostensibly is? This issues arises becuz we're compa... Read More
I am trying to value diversified insurance companies using market multiples. When you have the "amortization of deferred policy acquisition costs" for life insurers, should I treat it as a cash expense, not as a non-cash amortization charge it ostensibly is? This issues arises becuz we're compa... Read More
Why and how does the revolver balance the BS
Usually I use a simple plug to balance the BS but after taking your class I would like to incorporate a debt sweep to do this. However, I am unsure as to why the revolver balances the BS and can’t get the debt sweep to balance my models. I understand the formula pays down debt if there is cash a... Read More
Usually I use a simple plug to balance the BS but after taking your class I would like to incorporate a debt sweep to do this. However, I am unsure as to why the revolver balances the BS and can’t get the debt sweep to balance my models. I understand the formula pays down debt if there is cash a... Read More
Forex Gains (losses)
Hi WST, I understand that if, say, a US company with functional currency of USD and issues debt denominated in a foreign currency then each quarter the company will need to adjust the debt with foreign currency exchange gains (losses) on the balance sheet and income statement. Now, I am curious if ... Read More
Hi WST, I understand that if, say, a US company with functional currency of USD and issues debt denominated in a foreign currency then each quarter the company will need to adjust the debt with foreign currency exchange gains (losses) on the balance sheet and income statement. Now, I am curious if ... Read More
Re: Scatter Plot Data
Hi! thank you so much for your reply. I just checked this after a long time i thought we got notifications for replies... I would love to know how to do the graph you did, it would help a lot! let me know if you would like to post a reply or even speak on the phone if that would be easier to discu... Read More
Hi! thank you so much for your reply. I just checked this after a long time i thought we got notifications for replies... I would love to know how to do the graph you did, it would help a lot! let me know if you would like to post a reply or even speak on the phone if that would be easier to discu... Read More
Correct benchmark for beta
I'm a buy-side equity analyst at a European bank that has an equity portfolio of only euro zone stocks. In my valuation models, namely discounted cash flows, to arrive the WACC of a specific stock I use the Beta of the stock versus a European benchmark (I use Dow Jones Eurostoxx 50 index) with daily... Read More
I'm a buy-side equity analyst at a European bank that has an equity portfolio of only euro zone stocks. In my valuation models, namely discounted cash flows, to arrive the WACC of a specific stock I use the Beta of the stock versus a European benchmark (I use Dow Jones Eurostoxx 50 index) with daily... Read More
I actually took that course but I am still confused....Apologies for my lack of understanding. The company I follow has provision for taxes which I assume means income tax expense of 2%, not 40%. Thus GAAP Net income is pretax income * (1-2%). They have NOLs that offset pretax income for sev... I actually took that course but I am still confused....Apologies for my lack of understanding.
The company I follow has provision for taxes which I assume means income tax expense of 2%, not 40%.
Thus GAAP Net income is pretax income * (1-2%).
They have NOLs that offset pretax income for several years into the future. Thus, no taxes payable.
Based on THIS scenario and with these parameters
End Pretax Income = $1000
DTA beginning of period = $5000
What is Net income at end of year, DTA at end of year, and what is Cash flow from operations at end of year? I apology in advance for taking up so much time...this has been bugging me for a while now. Read More