Posts by: WST Expert 1
RE: Cost Accounting vs Equity Accounting
Cost Accounting - Procedures used for rationally classifying, recording, and allocating current or predicted costs that relate to a certain product or production process. translation: expenditures expensed as incurred (recorded as current period cost, immediately) refers to: recognition of expen... Read More
Cost Accounting - Procedures used for rationally classifying, recording, and allocating current or predicted costs that relate to a certain product or production process. translation: expenditures expensed as incurred (recorded as current period cost, immediately) refers to: recognition of expen... Read More
Re: Discount rate when FCFF = FCFE
Generally, we are not advocates of using FCFE. However,the scenario you proposed effectively equates FCFF = FCFE. If that were to be the case forever, as you stated, then it doesn't matter which discount rate you would use, since weight of debt in the WACC calculation would be zero and in theory, WA... Read More
Generally, we are not advocates of using FCFE. However,the scenario you proposed effectively equates FCFF = FCFE. If that were to be the case forever, as you stated, then it doesn't matter which discount rate you would use, since weight of debt in the WACC calculation would be zero and in theory, WA... Read More
Re: Enhancements to the core model- Part II EVA analysis
Yes, there is a discrepancy. Our videos had an error and incorrectly grabbed on only the Debt numbers and missed the Equity figures. The XLS template on the system is the corrected numbers. You could have verified this on your own by linking the green colored cells in the template to your actual mod... Read More
Yes, there is a discrepancy. Our videos had an error and incorrectly grabbed on only the Debt numbers and missed the Equity figures. The XLS template on the system is the corrected numbers. You could have verified this on your own by linking the green colored cells in the template to your actual mod... Read More
Re: Discounted EVA approach
Your approach seems correct. Don't forget terminal value as well.If you're going out 25 years, then it won't have a major impact anyway. Make sure that Total Capital is Debt + Equity (preferred, etc). normally, we use book values for all. particularly important when comparing market values of equit... Read More
Your approach seems correct. Don't forget terminal value as well.If you're going out 25 years, then it won't have a major impact anyway. Make sure that Total Capital is Debt + Equity (preferred, etc). normally, we use book values for all. particularly important when comparing market values of equit... Read More
Re: DDM is not used in practice?
Correct. DDM is only for academics and textbooks. However, as you noted, DDM is relevant for a sector number of industries, such as banks, REITs and utilities. Not necessarily because DPS is a larger % of EPS, but because they are considered dividend paying stocks in which the dividend yield matter... Read More
Correct. DDM is only for academics and textbooks. However, as you noted, DDM is relevant for a sector number of industries, such as banks, REITs and utilities. Not necessarily because DPS is a larger % of EPS, but because they are considered dividend paying stocks in which the dividend yield matter... Read More
Re: Ev calc? Inlcude postretirement liab's and pension liab's?
What is the total debt, cash and unfunded pension and opeb liabilities? Also, from what perspective are you analyzing the company? Standalone valuation (ie start with TEV and boil down to equity value and price per share, as well as vice versa, or from an m&a standpoint? Importantly, what is th... Read More
What is the total debt, cash and unfunded pension and opeb liabilities? Also, from what perspective are you analyzing the company? Standalone valuation (ie start with TEV and boil down to equity value and price per share, as well as vice versa, or from an m&a standpoint? Importantly, what is th... Read More
RE: Maintenance capex vs capital expenditures revisited
YES! CapEx that is not purely maintenance capex is to be reflected in the Free Cash Flow to Firm calculation! To do is would be remiss and excluding a significant portion of cash that doesn't below to the firm's stakeholders!
YES! CapEx that is not purely maintenance capex is to be reflected in the Free Cash Flow to Firm calculation! To do is would be remiss and excluding a significant portion of cash that doesn't below to the firm's stakeholders!
RE: Accounting: ROC
Add interest expense! The idea is that you calculate the returns that capita contributors receive. Net income goes to equity stakeholders and interest expense goes to debt holders, so the total return that all capital holders receive is net income + interest expense over equity+debt Join our ... Read More
Add interest expense! The idea is that you calculate the returns that capita contributors receive. Net income goes to equity stakeholders and interest expense goes to debt holders, so the total return that all capital holders receive is net income + interest expense over equity+debt Join our ... Read More
Re: Gordon growth / growing perpetuity method used to value?
Correct. the course you are referring to is a SIMPLE approach for concepts.
the "simple DCF" doesn't incorporate the cash flows earned and just uses gordon growth.
ditto for DDM - which is valuing the stock price and hence the equity value (not TEV).
Correct. the course you are referring to is a SIMPLE approach for concepts.
the "simple DCF" doesn't incorporate the cash flows earned and just uses gordon growth.
ditto for DDM - which is valuing the stock price and hence the equity value (not TEV).
As of now, unfortunately we do not have our Project Finance courses available in an online format. This is only available in an on-site corporate training format.