Valuation Topics
Topics related to standalone valuation including fundamental valuation, relative valuation, sum-of-parts and other techniques
Subtopics
Last 10 posts
Beta for Cost of Equity
Hello WST, I understand that many have access to Bloomberg terminal at work or in school so getting beta for a particular stock is not an issue. However, would you have any recommendation for those who don't have Bloomberg and need beta to calculate cost of equity for a particular company? For ex... Read More
Hello WST, I understand that many have access to Bloomberg terminal at work or in school so getting beta for a particular stock is not an issue. However, would you have any recommendation for those who don't have Bloomberg and need beta to calculate cost of equity for a particular company? For ex... Read More
DCF Mid-Year Convention
Hello WST,
A quick question, would you recommend using mid-year convention for DCF because obviously firms don't normally receive all its cash at the end of the fiscal year? Many thanks.
Hello WST,
A quick question, would you recommend using mid-year convention for DCF because obviously firms don't normally receive all its cash at the end of the fiscal year? Many thanks.
DCF Correct Time Period inputs
Hi WST, I have a not so smart question, let's say I am making a 5 year projection (2018-2022) for DCF analysis to calculate a company's implied stock price. Now, the company just releases its latest financial statements. So should I use the latest financial figures to calculate, say, net debt, an... Read More
Hi WST, I have a not so smart question, let's say I am making a 5 year projection (2018-2022) for DCF analysis to calculate a company's implied stock price. Now, the company just releases its latest financial statements. So should I use the latest financial figures to calculate, say, net debt, an... Read More
Warrants
Why do companies issue warrants? Do warrants usually have a premium price over the current market value? if yes, why is that?
Why do companies issue warrants? Do warrants usually have a premium price over the current market value? if yes, why is that?
Stock rights offering
Why is that the stock price normally gap down after ex rights date? What seems to be the logical reason for the price adjustments?
Why is that the stock price normally gap down after ex rights date? What seems to be the logical reason for the price adjustments?
Hedging Instruments and TEV
Hi, is there ever a case when you would add/subtract the fair value of hedging instruments when getting to enterprise value from equity value?
Hi, is there ever a case when you would add/subtract the fair value of hedging instruments when getting to enterprise value from equity value?
Question on interest income impact on FCFE and valuation
I have this company with no debt and high cash pile. (1) In the FCFE calculation = FCFF - (int x (1-tax)) + net borrowing; I will need to add back interest expense * (1-tax). But in my Co case with high cash pile, do i add back interest income instead? (2) when determining the value per shar... Read More
I have this company with no debt and high cash pile. (1) In the FCFE calculation = FCFF - (int x (1-tax)) + net borrowing; I will need to add back interest expense * (1-tax). But in my Co case with high cash pile, do i add back interest income instead? (2) when determining the value per shar... Read More
Accounting question on
A company invest in a target and obtain 40% stake for 120mn. So the target is valued at 300mn. 6 months later, the company is increasing its stake in the target from 40% to 60%. The announcement read: "The increased stake will take effect following a share capital increase, whi... Read More
A company invest in a target and obtain 40% stake for 120mn. So the target is valued at 300mn. 6 months later, the company is increasing its stake in the target from 40% to 60%. The announcement read: "The increased stake will take effect following a share capital increase, whi... Read More
Free Cash Flow to Equity
Would increase in debt (refinancing) in a year increase free cash flow to equity in that year?
Would increase in debt (refinancing) in a year increase free cash flow to equity in that year?
When i do a DCF model and used a discount rate of 15%, I generated an equity value say 100 dollars. As we move into next year, I need to adjust my discount factor, making year 1 into year 0, my equity value will be increase to 113. My question is how come my equity value is 115, shouldn't my equit... When i do a DCF model and used a discount rate of 15%, I generated an equity value say 100 dollars. As we move into next year, I need to adjust my discount factor, making year 1 into year 0, my equity value will be increase to 113. My question is how come my equity value is 115, shouldn't my equity value increase by my discount rate, which is 15% as my discount rate unwind? thanks Read More