Francine Way

JULY 12, 2017

As I mentioned in my last post, Discounted Cash Flow (DCF) is a valuation method that uses free cash flow projections, a discount rate, and a growth rate to find the present value estimate of a potential investment. The major steps of DCF are: Identify extraordinary, unusual, non-recurring items from the target’s 10-Ks and 10-Qs.

Discounted Cash Flow 130

Discounted Cash Flow Valuation M&A DCF 130

Francine Way

JULY 13, 2017

Calculating cost of debt, cost of equity, and weighted average cost of capital (WACC). The multiples calculation then proceeded as follow: Market Capitalization = Share Price * Fully-diluted Shares Outstanding. Enterprise Value = Market Capitalization + Total Debt - Total Cash. They are basically the same for this exercise.

Valuation 130

Valuation M&A DCF Book-building 130

Francine Way

JULY 11, 2017

Access to credible sources of information such as SEC EDGAR database , Treasury.gov , OECD GDP Forecast , Mergent Online, S&P Capital IQ, Hoovers, ValueLine, Yahoo Finance , MarketWatch , and Damodaran Online. Information listed in the DCF analysis: See the items listed under DCF above.

Valuation 130

Valuation M&A DCF Financial Statement 130

Francine Way

JULY 18, 2017

Because dividends is a piece of equity, we can use the Capital Asset Pricing Model (CAPM) to calculate the proper Rate of Return (r). Projected Book Value of Equity at the end of the 15 years = from the proforma balance sheet that we developed in our DCF post. The 1st step in DDM is to derive the proper discount rate (Rate of Return).

Valuation 130

Valuation M&A DCF Shares 130

Francine Way

JULY 20, 2017

Thus far, we have covered four popular valuation methods in M&A (DCF, Comparable Company, Precedent Transaction, and LBO) and one less known one that is making its way out of the academic realm into the business world (Dividend Discount Method, DDM). The lease origination business is valued at a multiple of upfront fees less costs.

Valuation 130

Valuation M&A Business IT 130

Francine Way

JULY 17, 2017

For this table, recall that LBO transactions are heavily financed with debt (it can go up to 90% of the capital structure for some deals). Capex as % of Sales = - Capital Expenditures / Revenue. Because this step is similar in this method as it is in the other valuation methods (DCF, Comparable Company, etc.),

Valuation 130

Valuation M&A Debt Book-building 130

OfficeHours

MAY 19, 2023

If you’ve ever thought that Buyside might be for you — whether it be Growth Equity, Private Equity, Hedge Funds, Corporate Development, Venture Capital, etc. Learn to interpret anonymous blog critiques as a tool for professional success. Read more blogs Learn how to perform a comprehensive LBO analysis in just a few simple steps!

Discounted Cash Flow 130

Discounted Cash Flow Financial Analysis Accountant DCF 130