Posts by: WST Expert 1
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.
RE: LBO Deal Structuring and Capital Lease Treatment Discussions
QUESTION: RE: LBO modeling: when a company you’re analyzing in order to do an LBO has capital leases on its balance sheet, what’s the proper way to reflect that in the sources and uses? That is: let’s assume they have $20mm of capital leases on the balance sheet right now (IE pre transacti... Read More
QUESTION: RE: LBO modeling: when a company you’re analyzing in order to do an LBO has capital leases on its balance sheet, what’s the proper way to reflect that in the sources and uses? That is: let’s assume they have $20mm of capital leases on the balance sheet right now (IE pre transacti... Read More
Re: Distressed Debt Model
When evaluating HY bonds, the core model makes a lot of sense but shouldn't one also evaluate HY bonds from the perspective of the corporation going into bankruptcy? Shouldn't one focus much on the downside which is why I was thinking (incorrectly) tying in the distressed model as a method of evalu... Read More
When evaluating HY bonds, the core model makes a lot of sense but shouldn't one also evaluate HY bonds from the perspective of the corporation going into bankruptcy? Shouldn't one focus much on the downside which is why I was thinking (incorrectly) tying in the distressed model as a method of evalu... Read More
RE: Building in divestitures/future acquisitions/stock buybacks
The following are the implications involved in each of the 3 scenarios: (i) Divestiture – Depending on whether it is a stock or asset sale will determine what the tax implications are to determine the net proceeds received by the selling company. The net proceeds will impact the financial stat... Read More
The following are the implications involved in each of the 3 scenarios: (i) Divestiture – Depending on whether it is a stock or asset sale will determine what the tax implications are to determine the net proceeds received by the selling company. The net proceeds will impact the financial stat... 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... 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 comparison purposes. Read More