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Limitations of discounted cash flow valuation models

Private Equity Info

While the discounted cash flow (DCF) methodology is the most rigorous and financially sound for business valuation, it does have several significant limitations, namely:

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Understanding the Impact of Interest Rates on Private Equity and Business Valuations

Focus Investment Banking

One aspect that is often talked about and significantly impacts the business landscape is the relationship between interest rates, private equity groups, and business valuations. For private equity (PE) groups, these rates determine the cost of capital, which is essential for their investment strategies.

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05-19-2023 Newsletter: TONIGHT ONLY: $99 Buyside Starter Kit

OfficeHours

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. A Few Reads to Digest Valuation Simplified: How Discounted Cash Flow Modeling Drives Financial Analysis Harness Discounted Cash Flow (DCF) modeling for financial analysis.

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Delaware Supreme Court Reverses And Remands Appraisal Award But Rejects Bright-Line Presumption In Favor Of Deal Price

Shearman & Sterling

reversed and remanded an appraisal ruling that had determined the buyout of DFC Global Corporation ("DFC") by private equity investor Lone Star at $9.50 per share, by giving equal weight to: (1) the deal price, (2) a comparable companies analysis, and (3) a discounted cash flow analysis. Strine, Jr.,

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Delaware Supreme Court Reverses And Remands Dell MBO Appraisal Decision, Finding The Trial Court Erroneously Disregarded The Deal Price

Shearman & Sterling

. ("Dell") by its CEO and founder, Michael Dell, and affiliates of a private equity firm, Silver Lake Partners ("Silver Lake"), at $13.75 After a trial, the Court of Chancery had disregarded the deal price and instead applied its own discounted cash flow ("DCF") analysis, arriving at a valuation of $17.62

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Delaware Supreme Court Reverses And Remands Appraisal Award But Rejects Bright-Line Presumption In Favor Of Deal Price

Shearman & Sterling

reversed and remanded an appraisal ruling that had determined the buyout of DFC Global Corporation ("DFC") by private equity investor Lone Star at $9.50 per share, by giving equal weight to: (1) the deal price, (2) a comparable companies analysis, and (3) a discounted cash flow analysis. Strine, Jr.,

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Delaware Supreme Court Reverses And Remands Dell MBO Appraisal Decision, Finding The Trial Court Erroneously Disregarded The Deal Price

Shearman & Sterling

. ("Dell") by its CEO and founder, Michael Dell, and affiliates of a private equity firm, Silver Lake Partners ("Silver Lake"), at $13.75 After a trial, the Court of Chancery had disregarded the deal price and instead applied its own discounted cash flow ("DCF") analysis, arriving at a valuation of $17.62