DCF Equities M&A 
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.
Francine Way
JULY 13, 2017
Calculating cost of debt, cost of equity, and weighted average cost of capital (WACC). Determining the year-by-year future non-equity claims from the latest 10-K, especially those that will occur during the forecast horizon, and their combined present value. Tangible Book Value = Book Value of Equity - Goodwill.
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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. The specific tools and data required for the analysis is determined by the type of valuation method used in the analysis.
Mergers and Inquisitions
JANUARY 22, 2025
We sometimes get questions about why we dont offer an equity research course. People are convinced that financial modeling in equity research is vastly different from investment banking and that research requires different or more specialized skills. IB is all about deals , while ER is all about coverage.
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). To perform this forecast, we need the target’s dividend history again, the book value of equity and year-end shares outstanding, and the stock prices at year-end.
Francine Way
JULY 17, 2017
This current post about Leveraged Buy Out (LBO) is about a valuation method used by a very specific type of financial acquirer: private equity (PE) firms. We then calculate Implied Equity Purchase Price as follow: Transaction (Enterprise) Value = Most current EBITDA * EBITDA Multiple. Building a proforma balance sheet.
Francine Way
JULY 19, 2017
Thus far, we have discussed five valuation methods: DCF, Comparable Company, Precedent Transaction, LBO, and Dividend Discount Model (DDM). In all of these discussions, we assumed a set of static values for our variables. In other words, we assumed that each variable can have only one value. To-date, we have lumped them together.
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