Posts by: WST Expert 1
Re: Complex LBO Modeling Enhancements - Mezzanine / Warrant Holder Investment Return (with PIK and Warrants)
1) Yes, correct - in essence, the basic shareholders get diluted. If you are the mezzanine holder, you would be diluting basic shares. If you are both mezz AND common, in essence, you are diluting yourself in part, BUT mezz offers some protections that common doesn't have. 2) Yes, if warrants are... Read More
1) Yes, correct - in essence, the basic shareholders get diluted. If you are the mezzanine holder, you would be diluting basic shares. If you are both mezz AND common, in essence, you are diluting yourself in part, BUT mezz offers some protections that common doesn't have. 2) Yes, if warrants are... Read More
Re: Windows 10 - Data Value for Default Background Colour of White
Hi Andrew,
The default value is "255 255 255" to represent white. Afterward, you can log out and log back in (or restart Windows) so the changes can take effect.
Hi Andrew,
The default value is "255 255 255" to represent white. Afterward, you can log out and log back in (or restart Windows) so the changes can take effect.
Re: error
Please put the correct EPS.
Please put the correct EPS.
Re: Asset Acquisition: Customer Relationship
1) If EBIT is already negative, then why are you guys buying the business? Unless you have a plan to turn it positive. If so, I'd use those figures for your pro forma modeling. Of course, you still have to execute properly. 2) You can use after tax NPV is fine. Just that normally when referencing... Read More
1) If EBIT is already negative, then why are you guys buying the business? Unless you have a plan to turn it positive. If so, I'd use those figures for your pro forma modeling. Of course, you still have to execute properly. 2) You can use after tax NPV is fine. Just that normally when referencing... Read More
Re: Asset Acquisition: Customer Relationship
For valuation of customer list, it is typical to take the following high level steps, which normally follow FASB 141/142 (IFRS 3) for intangible valuation: - take the existing revenue derived from relationships - do NOT include additional future, as of yet unacquired customers - assume a reason... Read More
For valuation of customer list, it is typical to take the following high level steps, which normally follow FASB 141/142 (IFRS 3) for intangible valuation: - take the existing revenue derived from relationships - do NOT include additional future, as of yet unacquired customers - assume a reason... Read More
Re: Why is interest expense not added to pre-tax income?
Typically from an accounting perspective, interest on construction loans is not considered interest, it is considered part of cost basis. Regarding the permanent loan (i.e. mortgage), we were calculating everything on a pre-leverage basis, hence the exclusion of the mortgage interest. Indeed you wou... Read More
Typically from an accounting perspective, interest on construction loans is not considered interest, it is considered part of cost basis. Regarding the permanent loan (i.e. mortgage), we were calculating everything on a pre-leverage basis, hence the exclusion of the mortgage interest. Indeed you wou... Read More
Re: CapEx and capital lease
Yes, you are correct from a purely technical standpoint. However, keep in mind that such capital lease increases would be actually reflected in CFF, so the net impact is still properly reflected in the model. From an accounting debits and credits perceptive, capital lease liability on the BS would g... Read More
Yes, you are correct from a purely technical standpoint. However, keep in mind that such capital lease increases would be actually reflected in CFF, so the net impact is still properly reflected in the model. From an accounting debits and credits perceptive, capital lease liability on the BS would g... Read More
Re: FCFF - Unlevered Free Cash Flow
Please see response below to your other related query.
Thank you.
Please see response below to your other related query.
Thank you.
Re: FCFF (Unlevered Free Cash Flow)
Using DCF may not be the most appropriate valuation methodology if the company cannot sustain its required CapEx. Sounds like your company is in earlier stage growth mode, which DCF is not really applicable. Additionally, we would most definitely not recommend the FCFF formulas you referenced in ... Read More
Using DCF may not be the most appropriate valuation methodology if the company cannot sustain its required CapEx. Sounds like your company is in earlier stage growth mode, which DCF is not really applicable. Additionally, we would most definitely not recommend the FCFF formulas you referenced in ... Read More
Yes, per answer to your previous question, you would also get mezz principal back. However, do note that if you are indeed exercising your warrants before exit year, the model would need to be adjusted to reflect such exercise, including the following adjustments: - increase in shares outstandin... Yes, per answer to your previous question, you would also get mezz principal back.
However, do note that if you are indeed exercising your warrants before exit year, the model would need to be adjusted to reflect such exercise, including the following adjustments:
- increase in shares outstanding (which we didn't model out because we don't really need EPS calculation post-LBO)
- if you are not doing a cashless convert, then you'd have to pay up the exercise price for the warrants so the company receives cash (APIC up) Read More