Posts by: WST Expert 1
Re: dollar sign to "R"
You're quite welcome. Glad we could be of assistance!
You're quite welcome. Glad we could be of assistance!
Re: Distressed Debt Model
Our distressed model is not meant for evaluating HY bonds. We would suggest our regular "Core Model" which maps out cash flows and credit ratios to evaluate non-distressed high yield. Our distressed model is essentially for an imminent bankruptcy (or in bankruptcy). In addition, our Covena... Read More
Our distressed model is not meant for evaluating HY bonds. We would suggest our regular "Core Model" which maps out cash flows and credit ratios to evaluate non-distressed high yield. Our distressed model is essentially for an imminent bankruptcy (or in bankruptcy). In addition, our Covena... Read More
RE: Leveraged-adjusted exchange ratios in M&A stock deals
Traditionally these are used purely to evaluate stock vs stock, so it's not been practice to leverage-adjust. however, you could by simply using TEV, EBITDA, Equity Value, etc for both a contribution and exchange ratio. Exchange Ratios are most helpful over a time period rather than static, for comp... Read More
Traditionally these are used purely to evaluate stock vs stock, so it's not been practice to leverage-adjust. however, you could by simply using TEV, EBITDA, Equity Value, etc for both a contribution and exchange ratio. Exchange Ratios are most helpful over a time period rather than static, for comp... Read More
Re: Core Model DCF - terminal cashflow
Great! let us know if we can assist further.
Great! let us know if we can assist further.
Re: Cost of Equity and Debt
Recall that the WACC analysis is meant to capture the MARGINAL cost of capital for the company. As such, you definitely use MARKET VALUE of equity and debt. In reality, for non-distressed companies, we proxy market value of debt by using book value of debt. Minor, immaterial differences, so no worri... Read More
Recall that the WACC analysis is meant to capture the MARGINAL cost of capital for the company. As such, you definitely use MARKET VALUE of equity and debt. In reality, for non-distressed companies, we proxy market value of debt by using book value of debt. Minor, immaterial differences, so no worri... Read More
RE: 338(h)(10) elections and foreign (non-US) companies
If a foreign corporation is a "qualifying foreign purchasing corporation" (see requirements under Treasury Regulation 1.338-2) and the target is a "qualifying foreign target", a Section 338 election can be made. Of course, it's only applicable to the extent that the Parent and/or target are subject ... Read More
If a foreign corporation is a "qualifying foreign purchasing corporation" (see requirements under Treasury Regulation 1.338-2) and the target is a "qualifying foreign target", a Section 338 election can be made. Of course, it's only applicable to the extent that the Parent and/or target are subject ... Read More
RE: Complex LBO Modeling: about change in account receivables
This is fully explained in our accounting course! In a nutshell an increase in a/r means that you collected LESS $ than last year, thus, it is a USE of cash, so prior year less current year, assuming growth in a/r balance results in a negative number. The textbooks teach "take the negative change" w... Read More
This is fully explained in our accounting course! In a nutshell an increase in a/r means that you collected LESS $ than last year, thus, it is a USE of cash, so prior year less current year, assuming growth in a/r balance results in a negative number. The textbooks teach "take the negative change" w... Read More
Re: Complex LBO - putting short term and long term debt together
What we did in reclassifying STD into LTD is purely to reclassify it. We aren't making any adjustments to the actual balances, thus, there is no need to reference to H29. Put it this way - completely hard code a zero into STD and put that amount into LTD. We did the *0 so that we can still see the o... Read More
What we did in reclassifying STD into LTD is purely to reclassify it. We aren't making any adjustments to the actual balances, thus, there is no need to reference to H29. Put it this way - completely hard code a zero into STD and put that amount into LTD. We did the *0 so that we can still see the o... Read More
Re: Balancing the Core Model
you're welcome! let us know if we can help further.
you're welcome! let us know if we can help further.
Since we did not take the actual future cash flows of the bond, we estimated it in the model by assuming (somewhat random) %age as you noted. If you did have the actual future cash flows of the bonds (notably, future interest payments), you would take the NPV of such future cash flows + accrued inte... Since we did not take the actual future cash flows of the bond, we estimated it in the model by assuming (somewhat random) %age as you noted.
If you did have the actual future cash flows of the bonds (notably, future interest payments), you would take the NPV of such future cash flows + accrued interest and then use that actualy number instead of an assumed %age. That would then be tender costs, specifically, the "make whole provision". If the bond is a callable bond, then the call premium is sufficient. Since that gets a bit too much into debt capital markets, we didn't cover it in the LBO course. Read More