Insurance financial modeling
Hi, I completed the insurance finacial modelling course (self-study). One issue I have found is that in the sweep, based i=on the formulas provided in the video, the minimum cash balance does not actually drive cash equirments. For example you could change the minimum cash balance in row 15 to $50... Hi,

I completed the insurance finacial modelling course (self-study). One issue I have found is that in the sweep, based i=on the formulas provided in the video, the minimum cash balance does not actually drive cash equirments. For example you could change the minimum cash balance in row 15 to $500 from $10 and it would not flow throught to the cash sweep and the BS. the BS remains at $135 and there is no liquidation of investments to make up shortfall. Read More

WST Macro Problem
Hi,

My WST Macros (3.2.5) aren't working in Excel 2003. I have the Capital IQ plugin installed as well, as well as a couple of other plugins and addins. Is there a way to disable them when necessary and then re-enable them when needed? I would like to use the WST Macros primarily.

Thanks.

RE: Complex Trading Comps Analysis: Convertibles of COSTCO
My first question is about COSTCO's convertibles. I was familiar with "if converted method" to measure the potential dilutive effects of potential dilution from CFA curriculum. The explanation given in the lecture was quite different. In the video, it was explained that whenever the face valu... My first question is about COSTCO's convertibles. I was familiar with "if converted method" to measure the potential dilutive effects of potential dilution from CFA curriculum. The explanation given in the lecture was quite different.

In the video, it was explained that whenever the face value of the outstanding convertibles is larger than the market value of the equivalent number of shares if converted, the holder of the convertible will not convert and there is no need for adjustment with respect to share dilution.

Isn't this commensurate to comparing apples to oranges? Normally, one would compare present values to present values and future values to future values. Face value of the convertibles is their future value. Their PV is far below their face value and also the value of the shares if converted.

In White and et al. (2003) the comparison of share price and the conversion price is given as a decision rule for deciding for the dilutive effects of convertible bonds and using option pricing models is suggested as one of the ways to separate debt and equity values of the convertible bonds.

So the decision for the holder of the convertible is whether to exchange or not the PV of the convertibles for the equivalent number of COSTCO common shares. If this value is less than the total value of the shares,the convertibles are likely to be converted.

So to sum it up, why is the future value (i.e., face value) of convertibles compared to the market value of shares?

2. When COSTCO's debt is being calculated, long-term debt and current portion of long-term debt from latest 10Q are simply added. However, long-term debt includes capital leases and there was no adjustment for that. Is there a special reason for not deducting the capital leases in case of COSTCO? Read More

LBO Deal Structuring and Capital Lease Treatment Discussions
Full Question:
LBO Deal Structuring and Capital Lease Treatment Discussion Thread

338(h)(10) elections and foreign (non-US) companies
Full Question:
I had a question re the 338(h)(10): is that something that only can be elected if both target and acquirer are US domiciled companies, or can a foreign buyer and/or foreign target do a 338(h)(10), as well?