Posts by: WST Expert 1
RE: How to Analyze a 10K: about the pension section
There is a brief discussion of pensions in the "Other Comprehensive Income" footnote discussion in the main 10K video. Our full pension class is not online at this point.
There is a brief discussion of pensions in the "Other Comprehensive Income" footnote discussion in the main 10K video. Our full pension class is not online at this point.
Re: Free cash flow yield
Again, we need to clarify what FCF is - FCFF or FCFE? if FCFE the Price/FCFE is legit. While we may not like the use of FCFE, but the numerator and denominators are matched up. TEV/FCFF would likewise, be correct. You definition of FCF is unclear and non-standard and seems to be neither apples nor ... Read More
Again, we need to clarify what FCF is - FCFF or FCFE? if FCFE the Price/FCFE is legit. While we may not like the use of FCFE, but the numerator and denominators are matched up. TEV/FCFF would likewise, be correct. You definition of FCF is unclear and non-standard and seems to be neither apples nor ... Read More
Re: Circular Reference Fix
if you built the model correctly per our best practices, change the switch to 1 for beginning balance. this should remove circular references.
if you still have a circ or calculate, then you have an error elsewhere in the model that isn't due to interest (or just a wrong formula somewhere).
if you built the model correctly per our best practices, change the switch to 1 for beginning balance. this should remove circular references.
if you still have a circ or calculate, then you have an error elsewhere in the model that isn't due to interest (or just a wrong formula somewhere).
RE: Please clarify if any value is gained by buying back stock-1
In general, if markets are efficient and an asset is fairly priced, then there shouldn't be any excess returns at all and everything is a zero NPV project in theory. I usually say there are three reasons why a stock price should go up upon a share repurchase: (i) Financial / Mathematical: reduces sh... Read More
In general, if markets are efficient and an asset is fairly priced, then there shouldn't be any excess returns at all and everything is a zero NPV project in theory. I usually say there are three reasons why a stock price should go up upon a share repurchase: (i) Financial / Mathematical: reduces sh... Read More
RE: about LBO
It depends if you are buying more or less than 50% of the company. For instance, if less than 50%, this would be merely considered an equity investment and you, (the investor) would be considered the minority shareholder. Since you are asking the question in the context of an LBO it seems that yo... Read More
It depends if you are buying more or less than 50% of the company. For instance, if less than 50%, this would be merely considered an equity investment and you, (the investor) would be considered the minority shareholder. Since you are asking the question in the context of an LBO it seems that yo... Read More
RE: What do I do for beta of a company if there is no beta?
If there is no beta, use publicly traded competitors' beta! This is covered in our Corporate Valuation and Valuation (Trading Comps) classes. If a company has no beta, what are you regressing when you say regress the company's excess return to market? If a company has returns, then by definition the... Read More
If there is no beta, use publicly traded competitors' beta! This is covered in our Corporate Valuation and Valuation (Trading Comps) classes. If a company has no beta, what are you regressing when you say regress the company's excess return to market? If a company has returns, then by definition the... Read More
RE: Finance 101: DDM?
The answers to your question are all covered in great detail in our Corporate Valuation class!
Coupon rate = actual cash interest paid
YTM = yield to market or the market rate since the bond was issued
The answers to your question are all covered in great detail in our Corporate Valuation class!
Coupon rate = actual cash interest paid
YTM = yield to market or the market rate since the bond was issued
RE: Tr Comps overview questions
1) We use marginal tax rate b/c any additional new income is taxed at that (usually) higher rate rather than effective rate. If there is a progressive tax system in place or other tax credits that reduce (or increase) the tax rate, you don't want that distortion in there. 2) It depends on what co... Read More
1) We use marginal tax rate b/c any additional new income is taxed at that (usually) higher rate rather than effective rate. If there is a progressive tax system in place or other tax credits that reduce (or increase) the tax rate, you don't want that distortion in there. 2) It depends on what co... Read More
Re: calculating CHANGE in N.W.C , why monthly and not annual?
Good question! It is common convention to estimate working capital requirements for a service-based business, like insurance brokers or asset managers, to be 30 or 60 days of expenses (primarily to cover 1-2 months of salaries). As such, the change in working capital calculated as the difference fr... Read More
Good question! It is common convention to estimate working capital requirements for a service-based business, like insurance brokers or asset managers, to be 30 or 60 days of expenses (primarily to cover 1-2 months of salaries). As such, the change in working capital calculated as the difference fr... Read More
You have to remember the core lessons from my valuation class! If nothing else has happened to the company, why should there be a change to the value of the company (enterprise value)? If the "core, recurring profitability from core operations" has not changed, there is no change to TEV. Capital str... You have to remember the core lessons from my valuation class! If nothing else has happened to the company, why should there be a change to the value of the company (enterprise value)? If the "core, recurring profitability from core operations" has not changed, there is no change to TEV. Capital structure changes do not change this as capital structure is a "function" of debt and equity mix, meaning that equity value is a derived number. So if you just altering the capital structure mix, the core value (TEV) stays the same.
Your reference to M&M II seems to be tackling it the other way around - that equity value is the beginning point and u add debt to get TEV which is what we do to calc the current mkt observable TEV but again, that TEV is supposedly fixed if there are no changes to profitability.
This is the same concept of why we always use FCFF and never FCFE because calculating an equity-based number doesn't tell us anything abt the value of the company, but just the equity. Then, once u know TEV, you boil down to derive equity value. Read More