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

Mergers and Inquisitions

MAY 3, 2023

It can be useful for certain companies, such as power and utility firms and midstream (pipeline) operators in oil & gas … …but it’s also much harder to set up and use than a standard DCF. The main argument in favor of the DDM is that it best represents what happens in real life when you buy a stock.

Valuation 64

Valuation DCF Debt Financial Models 64

Lake Country Advisors

AUGUST 8, 2024

This metric provides a quick snapshot of a company’s total equity value as perceived by the stock market. This valuation reflects the market’s assessment of the company’s equity value based on its stock price and the number of shares available. million Year 2: $2 million / (1 + 0.10)^2 = $1.65 million + $1.65

Valuation 97

Valuation Discounted Cash Flow S&P DCF Analysis 97

Francine Way

JULY 11, 2017

Discounted Cash Flow (DCF) i s 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. Target’s current stock price: Can be obtained from sources such as Yahoo Finance. or as a premium percentage to current target’s stock price.

Valuation 130

Valuation M&A DCF Financial Statement 130

Francine Way

JULY 17, 2017

Building a historical 3-statement model and a debt-interest schedule. Building the go-forward debt-interest schedule. Implied Equity Purchase Price = Transaction Value - Debt + Cash. 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).

Valuation 130

Valuation M&A Debt Book-building 130

Mergers and Inquisitions

NOVEMBER 20, 2024

A: Unlike most PE deals, traditional growth equity deals do not use debt and are for minority stakes in companies, but they often have more “structure” via liquidation preferences and preferred stock. Assume that Cash = Debt in both the initial deal and the exit. If Cash = Debt, this is also the Exit Equity Value.

Private Equity 59

Private Equity Equities Capital Valuation 59

Francine Way

JULY 19, 2017

Thus far, we have discussed five valuation methods: DCF, Comparable Company, Precedent Transaction, LBO, and Dividend Discount Model (DDM). An example of this technique include the changes of stock value given differing: WACCs and long-term free cash flow growth rates. Well, in the real world, there is no certainties in business.

Valuation 130

Valuation M&A Stock DCF 130