Re: WACC : Historical Beta Values
The accepted and widely used definition on Wall Street is: ßL = ßu * [1 + (D/E) * (1 – T) ] Which works out algebraically to the same as the one you listed for Damodaran. In short, this means that the ßL is higher than ßu by a factor equal to D/E ratio (tax-effected) since debt introduces m... The accepted and widely used definition on Wall Street is:
ßL = ßu * [1 + (D/E) * (1 – T) ]

Which works out algebraically to the same as the one you listed for Damodaran.

In short, this means that the ßL is higher than ßu by a factor equal to D/E ratio (tax-effected) since debt introduces more volatility into earnings.

Rohit, this concept is fundamental to Corporate Finance and we have covered it extensively in our Finance 101 course and Corporate Valuation/Corporate Finance course. Please go here for more information:

Finance 101: http://www.wstselfstudy.com/package1-1.html
Corporate Valuation: http://www.wstselfstudy.com/package2-1.html

and just for asking smart questions, we'll give you 10% off: use discount code elearning Read More

Re: WACC : Historical Beta Values
your prior post: Q1: this is the part of the process of picking comparable companies; use the same criteria as those you think are closest to you Q2: it's like mean reversion: in statistics, never mix historical and projections when doing regression, the actual number will distort your results. Thi... your prior post:
Q1: this is the part of the process of picking comparable companies; use the same criteria as those you think are closest to you
Q2: it's like mean reversion: in statistics, never mix historical and projections when doing regression, the actual number will distort your results.

This is covered extensively in our Private Company Valuation class:
http://www.wstselfstudy.com/privateval.html

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RE: Deal Comps Analysis: Quick model formatting question
At the end of the day, it doesn't matter. In the Deal Comps, many firms do not input forward projections and such, a different template is used. You can most certainly use our Trading Comps template for Deal Comps. To answer your question about best practices, you are correct, be as clear as p... At the end of the day, it doesn't matter.
In the Deal Comps, many firms do not input forward projections and such, a different template is used. You can most certainly use our Trading Comps template for Deal Comps.

To answer your question about best practices, you are correct, be as clear as possible; however, Trading Comps are constantly updated whereas historical Deal Comps are not, so being completely dynamic is not always necessary for Deal Comps.

There are definitely different templates in each firm. We choose to go with a template that gets the job done with the least amount of work, but dynamic enough. Read More

Re: Core Model Enhancements - Tax Schedule
Amortization of Goodwill is not a tax-deductible expense. As such, it is a permanent difference in taxes. So it is not added back in that specific calculation since it does NOT reduce Taxable Income, resulting in higher income taxes since it is not deductible. To answer your direct question, Amort... Amortization of Goodwill is not a tax-deductible expense. As such, it is a permanent difference in taxes. So it is not added back in that specific calculation since it does NOT reduce Taxable Income, resulting in higher income taxes since it is not deductible.

To answer your direct question, Amortization of Intangibles is NOT added back in that specific calculation because it DOES reduce Taxable Income and thus, one pays lower taxes. So really, the adjustment is for Goodwill (usually zero amortization anyway), not for other intangibles. Read More

Re: Advanced Excel for Data Analysis--newer version?
The Excel charting videos are done in 2007.
The Adv Excel for Data Analysis class, while in 2003 is the same as in 2007.
All the keystrokes remain the same.
Any differences (like pivot tables) have a separate video for 2007.