Posts by: WST Expert 1
Re: Valuation Question
What's the number days inventory outstanding? If short number days, then revolver is ok. Commercial paper and revolvers are short term funding needs, like inv and a/r. However, if long lead time to produce and sell, then WACC. (Think GM - needs more permanent source of capital since they sell crap... Read More
What's the number days inventory outstanding? If short number days, then revolver is ok. Commercial paper and revolvers are short term funding needs, like inv and a/r. However, if long lead time to produce and sell, then WACC. (Think GM - needs more permanent source of capital since they sell crap... Read More
Re: Distressed Debt Model
High yield bonds do not necessarily mean bankruptcy is imminent. If bankruptcy is a possibility, then yes, you need the Distressed Modeling course (fulcrum, etc) and of course Valuation, sum of the parts, liquidation, asset sale, etc. Our Covenants & Credit Agreements course is not yet availab... Read More
High yield bonds do not necessarily mean bankruptcy is imminent. If bankruptcy is a possibility, then yes, you need the Distressed Modeling course (fulcrum, etc) and of course Valuation, sum of the parts, liquidation, asset sale, etc. Our Covenants & Credit Agreements course is not yet availab... Read More
RE: Using different debt securities to finance an LBO
Term loans (aka bank debt) are less expensive for a Company because they require a lower interest rate. However, they require regular mandatory paydowns, which decreases the Company’s available cash. Senior notes and senior discount notes are advantageous in that you defer paying them back until m... Read More
Term loans (aka bank debt) are less expensive for a Company because they require a lower interest rate. However, they require regular mandatory paydowns, which decreases the Company’s available cash. Senior notes and senior discount notes are advantageous in that you defer paying them back until m... Read More
Re: IRR decline
Here's a short summary of our discussion. The exit multiples are hypothetical. Rationale for Trends with Different Exit Multiples: – 8x: you are selling in Y1 at a much lower multiple than you bought in (huge neg). As you de-lever, you build equity quickly at the beginning, net debt pay down in Y... Read More
Here's a short summary of our discussion. The exit multiples are hypothetical. Rationale for Trends with Different Exit Multiples: – 8x: you are selling in Y1 at a much lower multiple than you bought in (huge neg). As you de-lever, you build equity quickly at the beginning, net debt pay down in Y... Read More
If there is a 10K filing it will be certain what the mandatory repayments are since itis required to be disclosed. You can find that info under the Debt footnote or Commitments and Contingents footnote (generally both actually). If its publicly traded there will almost definitely be a public filing ... If there is a 10K filing it will be certain what the mandatory repayments are since itis required to be disclosed. You can find that info under the Debt footnote or Commitments and Contingents footnote (generally both actually). If its publicly traded there will almost definitely be a public filing for the debt, whether an S4 or comparable document or attached to an old 10K. Otherwise, you would make an estimate as best as you can based on what you know about the company's history and capital structure. Read More