Posts by: WST Expert 1
Re: Discount rate unwinding
Hello! As you move into next year, do you add an extra column for an extra year - for instance, maintaining 5 years of projections? If so, then the difference may be due to the new projection year that is added not being the same growth or factor as the year that gets shifted out. If not,... Read More
Hello! As you move into next year, do you add an extra column for an extra year - for instance, maintaining 5 years of projections? If so, then the difference may be due to the new projection year that is added not being the same growth or factor as the year that gets shifted out. If not,... Read More
Re: Beta for Cost of Equity
One commonly accepted approach is to make a beta calculation using historical stock data. You could take a calendar year of daily closing prices for the S&P 500 index and the stock in question. Calculate each day's % change from the previous day, and then use something like the COVARIANCE.P or SL... Read More
One commonly accepted approach is to make a beta calculation using historical stock data. You could take a calendar year of daily closing prices for the S&P 500 index and the stock in question. Calculate each day's % change from the previous day, and then use something like the COVARIANCE.P or SL... Read More
Re: Terminal EBITDA multiple
If you assume multiple expansion or contraction, you would be distorting the value. For instance, if your entry multiple is 7x and you assume a 10x exit multiple then by definition your DCF value is going to increase and provide a higher value than the company or stock inherently has. Any multiple e... Read More
If you assume multiple expansion or contraction, you would be distorting the value. For instance, if your entry multiple is 7x and you assume a 10x exit multiple then by definition your DCF value is going to increase and provide a higher value than the company or stock inherently has. Any multiple e... Read More
Re: why Revolver is reduced after you put 6000$ in cash in 2006 ? Please answer urgently thank you
We are putting in a negative number for minimum cash balance which reduces the amount of cash that you can use. Therefore, you have to borrow on revolver to maintain minimum level of cash.
We are putting in a negative number for minimum cash balance which reduces the amount of cash that you can use. Therefore, you have to borrow on revolver to maintain minimum level of cash.
Re: Formula for F68-N72 on Value tab
Hello, YES, you are CORRECT. This was an errata that we have fixed subsequent to the course recording, but failed to note here. We apologize for the inconvenience and many kudos to catching this. Indeed it should be F$4 on as the second input to the OFFSET formula from the Value tab, and NOT cell F2... Read More
Hello, YES, you are CORRECT. This was an errata that we have fixed subsequent to the course recording, but failed to note here. We apologize for the inconvenience and many kudos to catching this. Indeed it should be F$4 on as the second input to the OFFSET formula from the Value tab, and NOT cell F2... Read More
Re: DCF Mid-Year Convention
Our pleasure!
Just to clarify how to do mid-year discounting with NPV formula:
=NPV(WACC,range)*(1+WACC)^0.5
Please see our Free Resources section for DCF mid-year discounting:
http://wallst.training/about/resources.html
Our pleasure!
Just to clarify how to do mid-year discounting with NPV formula:
=NPV(WACC,range)*(1+WACC)^0.5
Please see our Free Resources section for DCF mid-year discounting:
http://wallst.training/about/resources.html
Re: DCF Mid-Year Convention
It is not common practice to use mid-year convention for DCF discounting; however it would be perfectly fine to do so.
It is not common practice to use mid-year convention for DCF discounting; however it would be perfectly fine to do so.
Re: DCF Correct Time Period inputs
You're quite welcome and keep up the good work!
You're quite welcome and keep up the good work!
Re: DCF Correct Time Period inputs
YES - that is a perfect summary and we couldn't have summarized it better than you did! Side Note: Generally, we like a solid five (5) years of projections, therefore we would add in a 2023 year into the model. However, if your model only goes to 2022, it would be still ok, just recognize it's on... Read More
YES - that is a perfect summary and we couldn't have summarized it better than you did! Side Note: Generally, we like a solid five (5) years of projections, therefore we would add in a 2023 year into the model. However, if your model only goes to 2022, it would be still ok, just recognize it's on... Read More
Hello, Thank you for your inquiry. We feel taking the CFA is overkill to learn accounting, even if you focus on just the accounting portions. Our issue with books and textbooks is that they do not focus on what you need to know about accounting from the FINANCE perspective. And that's exactly how... Hello,
Thank you for your inquiry.
We feel taking the CFA is overkill to learn accounting, even if you focus on just the accounting portions. Our issue with books and textbooks is that they do not focus on what you need to know about accounting from the FINANCE perspective. And that's exactly how we designed our Accounting courses - to cut through the 400 pages and just give you the 40 pages you need to know in finance. Obviously that sounds like a self-promotion and plug, therefore, you probably cannot go wrong with whatever the top selling accounting books on Amazon - plus you'll save some money, the trade-off being you'll spend a lot of time and energy not being focused on what you need to know, although eventually you'll be able to pick it all up.
Read More