Posts by: WST Expert 1
Re: does the idiosyncratic risk of the company change?
Tricky question. Since firm specific risk is defined as total risk (sigma or standard deviation) less market risk, as the total risk of individual stock changes and assuming market risk stays constant (since we only update market risk premium once a year when Ibbotson publishes their updated Marke... Read More
Tricky question. Since firm specific risk is defined as total risk (sigma or standard deviation) less market risk, as the total risk of individual stock changes and assuming market risk stays constant (since we only update market risk premium once a year when Ibbotson publishes their updated Marke... Read More
RE: Please clarify if any value is gained by buying back stock-2
You have to remember the core lessons from my valuation class! If nothing else has happened to the company, why should there be a change to the value of the company (enterprise value)? If the "core, recurring profitability from core operations" has not changed, there is no change to TEV. Capital str... Read More
You have to remember the core lessons from my valuation class! If nothing else has happened to the company, why should there be a change to the value of the company (enterprise value)? If the "core, recurring profitability from core operations" has not changed, there is no change to TEV. Capital str... Read More
Re: Options Exerciseable versus Outstanding - Complex LBO
Vested means that the employee must usually stick around to get the right to exercise the options. For instance, if an employee receives 100 options but it vests pro-rata over 4 years, that means after the first year, the employee can only exercise 25 options (exercisable) although all 100 options a... Read More
Vested means that the employee must usually stick around to get the right to exercise the options. For instance, if an employee receives 100 options but it vests pro-rata over 4 years, that means after the first year, the employee can only exercise 25 options (exercisable) although all 100 options a... Read More
Re: IRR>WACC, chose this project?
You can order it here:
http://www.wstselfstudy.com/package1-1.html
You can order it here:
http://www.wstselfstudy.com/package1-1.html
Re: Shares Outstanding
Please review our online videos - particularly Corporate Valuation and DCF modules. IS number is a weighted average number of shares outstanding throughout the time period. the number in the front is the latest available basic shares outstanding. for DCF and current valuation, you use the lastest b... Read More
Please review our online videos - particularly Corporate Valuation and DCF modules. IS number is a weighted average number of shares outstanding throughout the time period. the number in the front is the latest available basic shares outstanding. for DCF and current valuation, you use the lastest b... Read More
Re: What is the purpose of management participation in the LBO?
After an LBO, you still need management to run the company and properly align economic interests. Hence sometimes an LBO is called an MBO for Mgmt Buyout (think Dell right now). If pre-LBO the company hasn't had to include all company employees in profit sharing, then post-LBO, financial sponsors pr... Read More
After an LBO, you still need management to run the company and properly align economic interests. Hence sometimes an LBO is called an MBO for Mgmt Buyout (think Dell right now). If pre-LBO the company hasn't had to include all company employees in profit sharing, then post-LBO, financial sponsors pr... Read More
RE: Modeling out pension expenses on the cash flow statement
Recall that pension expense is technically included in Compensation (usually part of SG&A). That does not necessarily mean they physically paid cash for that expense in that time period (matching principle of expenses, subset of accrual accounting). Therefore, the contribution to pension would b... Read More
Recall that pension expense is technically included in Compensation (usually part of SG&A). That does not necessarily mean they physically paid cash for that expense in that time period (matching principle of expenses, subset of accrual accounting). Therefore, the contribution to pension would b... Read More
RE: Quick & Dirty Basic LBO Model: Modeling Private Cos
Don't forget, the Shares Outstanding on the BS is a book number, not market value. You would have to have an implied value of the Equity (presumably based on valuation methodologies described in our Corporate Valuation course - trading comps, deal comps, DCF, etc) and instead of hard-coding a stock ... Read More
Don't forget, the Shares Outstanding on the BS is a book number, not market value. You would have to have an implied value of the Equity (presumably based on valuation methodologies described in our Corporate Valuation course - trading comps, deal comps, DCF, etc) and instead of hard-coding a stock ... Read More
RE: Inputting scheduled lease payments in the debt sweep
We would decrease capital lease on the balance sheet and put that in the cash flow statement just like working capital. In theory you have to account for imputed interest and depreciation.
We would decrease capital lease on the balance sheet and put that in the cash flow statement just like working capital. In theory you have to account for imputed interest and depreciation.
TEV means Total Enterprise Value. We would *HIGHLY* recommend you take our Corporate Valuation course! Back to your question: as stated above- you do not need Shares Outstanding, you would use Net Income. Again, we would highly recommend you take our Corporate Valuation course which touches upon ... TEV means Total Enterprise Value. We would *HIGHLY* recommend you take our Corporate Valuation course!
Back to your question: as stated above- you do not need Shares Outstanding, you would use Net Income. Again, we would highly recommend you take our Corporate Valuation course which touches upon this concept as well and when to use what. For accretion/dilution, you only need Net Income of the Target (among other things but in relation to your question). Please see our M&A Deal Structuring course that goes through this in detail.
Thank you. Read More