Posts by: WST Expert 1
Re: Ability to Pay Analysis
Recall, we said MARGINAL changes - so Synergies is a marginal change that only occurs as a result of the merger! So you must incorproate into your analysis as well. If you like, set synergies to zero, which is why we build a data table on synergies!
Recall, we said MARGINAL changes - so Synergies is a marginal change that only occurs as a result of the merger! So you must incorproate into your analysis as well. If you like, set synergies to zero, which is why we build a data table on synergies!
Re: GAAP requirement to recognize all known liabilities
the 40% applied to Taxable Income (TAX not GAAP) is the statutory rate.
It just so happens that the effective tax rate (GAAP) is very close to 40% as well since not much stuff is impacting the company from a permanent differences perspective.
the 40% applied to Taxable Income (TAX not GAAP) is the statutory rate.
It just so happens that the effective tax rate (GAAP) is very close to 40% as well since not much stuff is impacting the company from a permanent differences perspective.
RE: Capital leases - exclude vs include
Normally, per our instructions in the video, one would back out capital leases from the debt; however, because Costco's 10Q did not supply a full debt footnote in which we could have extracted such capital leases figures, we cannot just "make it up". One could argue to get it from Costco's 10K which... Read More
Normally, per our instructions in the video, one would back out capital leases from the debt; however, because Costco's 10Q did not supply a full debt footnote in which we could have extracted such capital leases figures, we cannot just "make it up". One could argue to get it from Costco's 10K which... Read More
Re: Quick & Dirty LBO
1) When you do the Complex LBO, you see that we sensitize depending on transaction structure (i.e. recap vs purchase accounting). In Recap accounting, trx costs are expensed and in Purchase accounting, trx costs are capitalized and increase GW. However, in 2009, trx costs are expensed regardless. So... Read More
1) When you do the Complex LBO, you see that we sensitize depending on transaction structure (i.e. recap vs purchase accounting). In Recap accounting, trx costs are expensed and in Purchase accounting, trx costs are capitalized and increase GW. However, in 2009, trx costs are expensed regardless. So... Read More
Re: Hedge Fund - why the double counting ???
From your message, it seems you are referring to the AUM calculation? Essentially, the LONG positions from the SHORT further increase your exposure - basically, you shorted securities, used the cash proceeds to then go and buy other securities. If necessary, please clarify the slide number or video... Read More
From your message, it seems you are referring to the AUM calculation? Essentially, the LONG positions from the SHORT further increase your exposure - basically, you shorted securities, used the cash proceeds to then go and buy other securities. If necessary, please clarify the slide number or video... Read More
RE: Treatment of converts for TEV
Per the instruction in the video, it clearly stipulates that the key question in the costco converts rests on the timing - how long away is the maturity of the converts? if it matures tomorrow, the holder wouldn't convert b/c they can get more by simply holding to maturity and receiving par value. a... Read More
Per the instruction in the video, it clearly stipulates that the key question in the costco converts rests on the timing - how long away is the maturity of the converts? if it matures tomorrow, the holder wouldn't convert b/c they can get more by simply holding to maturity and receiving par value. a... Read More
RE: Merger Modeling Basics: the question about the Fees
Great question - however this has to do with how the fees are actually paid - they are paid in cash or said another way, funded via cash as opposed to equity. You don't issue stock to pay for fees. Notice, even for 100% stock deals, it is still funded via cash. Stock is usually issued for stock else... Read More
Great question - however this has to do with how the fees are actually paid - they are paid in cash or said another way, funded via cash as opposed to equity. You don't issue stock to pay for fees. Notice, even for 100% stock deals, it is still funded via cash. Stock is usually issued for stock else... Read More
Re: GAAP requirement to recognize all known liabilities
Thank you for clarifying your question. Our initial response (which was based in part on the Advanced M&A module) is in reference to PERMANENT differences in taxes, which will never reverse in the future. An example of this is the deductibility of certain identifiable intangibles for GAAP but no... Read More
Thank you for clarifying your question. Our initial response (which was based in part on the Advanced M&A module) is in reference to PERMANENT differences in taxes, which will never reverse in the future. An example of this is the deductibility of certain identifiable intangibles for GAAP but no... Read More
RE: Difference btwn $100 special dividend vs share repurchase
Remember back to our share repurchase discussion. You are swapping out cash basically so same net effect to net equity value. Dividends get paid which reduces cash which is same as share repurchase. So the decrease in shares outstanding vs the interest cost is the same when you run the numbers. In t... Read More
Remember back to our share repurchase discussion. You are swapping out cash basically so same net effect to net equity value. Dividends get paid which reduces cash which is same as share repurchase. So the decrease in shares outstanding vs the interest cost is the same when you run the numbers. In t... Read More
If a deal is considered an Asset Deal or under a 338(h)(10) election, correct, technically there is no goodwill amortization, and instead, there is regular depreciation since the purchase price is thought of as an acquisition of assets as opposed to an acquisition of stock. If it is a true Asset Dea... If a deal is considered an Asset Deal or under a 338(h)(10) election, correct, technically there is no goodwill amortization, and instead, there is regular depreciation since the purchase price is thought of as an acquisition of assets as opposed to an acquisition of stock. If it is a true Asset Deal, then yes, the "additional" depreciation would need to be included in the model, specifically, increases depreciation and reduces Net Income and EPS. However, if it is a 338(h)(10) election as explained in the videos, then you DO NOT have to include the "additional" depreciation, while STILL GETTING the tax benefit since it is treated like a Stock deal for GAAP but an Asset Deal for tax purposes. Read More