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Role of margins in the DCF valuation process?
Hi guys, just wondering if someone could please explain the role of margins in the DCF valuation process. I've completed a few of Wall St Trainings self-study programs and the instructor calculates the margins for the historical years but no further. Other people in the industry though have...
Oil and Gas Valuation
How do you do a DCF valution of a small cap Oil and Gas E&P company ? What parameters do we use to predict future growth ?
What's hard about creating a DCF Model on excel?
The concepts are pretty basic, and obviously its an art and not a science. But when it comes to creating a DCF model on excel, where does it get complicated? From what I've seen, its very simple. You just insert formulas and link the different cells together. So how can companies like Wall Street...
DCF/Valuation Question
I had this question in an interview and I got it right, but my logic was a little off. Can someone clarify. The interviewer asked "9 times out of 10, which method of valuation will produce the highest valuation ( DCF vs . Public comps vs. transaction comps)?" I understand why transaction comps...
Valuation Question - Very basics questions
This may seem a very basic question to some but i appreciate any serious replies : Supposing you come up with a DCF value - which is say an FCFE or FCFF value whichever. And you also have a valuation based on the net assets of the company - will you add the 2 values ? DCF Value 52$ /share Net Asset...
What does it mean to perform sensitivity analysis in a straightforward DCF model?
I was asked this question on an interview, but I thought sensitivity analysis only applied for LBO models ? What would be the X axis? What would be the Y axis? What would be the the output we're trying to find? I'd appreciate it if someone could walk me through this. Thanks.
DCF of a Hospital
Hi, I am wondering if someone can describe some notable points that I need to be careful with when building a DCF model for a hospital. Thanks in advance.
Negative Operating Income and FCF's
I'm building a DCF model. How do I calculate tax expense when Operating Income (EBIT) is negative to get to FCFs? Net Operating Loss Carry Forward [quote "dosk17 - Retired Investment Banker"]Basically here is what you do: As the posters said above, if you have negative operating income then you...
Calculating Free Cash Flow 5-10 years + Discount Rate?
Not a business student here and just trying to learn the DCF technique through online sources. So my question is, how do I project free cash flow for 5-10 years out for a firm. The source that I have been looking at states that you must look at the firms free cash flow from the year before and then...
IRR vs. equity return
Hi, I have a very basic question as I'm preparing for PE interviews - and I am embarrassed to ask people at work. Basically, some sample models I see show equity returns in an LBO model - i.e. using the rate function in excel, the purchase price equity and the exit equity value . This takes into...
Pharma Comps/Precedents
Hey, Don't have banking resources available to me...just a student and wanted to know where I can find comps and precedents for pharmaceutical companies with transaction dates of 1998? I'm trying to make a football field (dcf, precedents, comps) for a project at school. The most recent financial...
DCF Perpetuity Growth Rate
What are you guys currently using for the perpetuity growth rate in the DCF? I know it typically mimics GDP growth, but that is looking pretty negative right now. Are people generally using around 1.0% or is it even lower? Perpetuity Growth Rate DCF From Macabus The perpetuity growth rate is...
DCF Crash Course
I have an interview with a firm coming up, and part of the interview is a modeling exercise (creating a DCF from scratch). As an underclassman, I have never taken a corporate finance or modeling course. I'll go through the Vault guide and absorb anything I can, but do you guys have any suggestions...
Calculating Fully Diluted Shares in DCF
Let say company's issues shares are 1,000,000 and has treasury shares of 100,000. Then the outstanding shares are 900,000. And let's assumme that outstanding option or CB convert into 200,000 shares using treasury share method. Price per share is USD 100. When determining the fully diluted shares to...
DCF
After obtaining the equity value for a company with a DCF valuation, do you divide the value by the common shares outstanding or diluted shares outstanding to obtain the per share value?
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