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Indirect impact of leverage on FCFF
In theory FCFF is not affected by debt and interest, however I'm struggling to find a way to fix this on a project finance model. There is a advisory fee upon debt, that I understand would be reported as financial expense, thereby affecting the FCFF accordingly to the leverage (higher leverage,...
Capital leases when calculating for Enterprise Value and Equity Value
Guys, help! I've moved from VC to PE as an analyst - essentially, from valuating small startups w/o debt, NWC, capex to DCF valuation of large capex, debt, NWC comps. Currently, on PE side I'm doing DCF for a university-startup which will start operating from next year. It has just signed $25mln...
financial modeling test for ER role
I have a 4-hr long test for an ER associate role coming up. It has both financial modeling and writing component. I have read a few older threads on this topic, but I cannot find an answer to my questions. so I'm trying to ask if anyone can help me to give some insights about the following: 1)...
How to calculate CF for particular investor?
Let's assume a company owns a "how to produce tech" and wants to raise some investments for lunching the production by exchanging 30% of its equity for X $ shareholder loan provided by new shareholder. We ignore the equity value as it's relatively small and represent only % of distribution of...
EV/FCFF multiple variance
Hey guys, I have two companies ("comparable companies"): both are expecting a next 3 yrs CAGR of 5% but one is trading at 20x FCFF and the other at 17x. What might be the reasons?
Negative Net Working Capital Valuation
What should I do if the result of Net Working Capital is negative? Because this impact the stock price
Calculating FCFE
Hi, when calculating FCFE, capital expenditures (fixed capital investment) has to be deducted and net borrowing has to be added. However, what about given loans? I'm working in construction company, which has many construction companies (SPVs) in their group. The company which I'm analysing...
Should cash flows form future Capex. be included in Future cash flows, while valuing a private company for merger
Hi, I am doing a DCF valuation of private company for a investor, who wants to fund a target requiring funds for future Capital investments. My query is whether I should value the company based on future cash flows of existing assets or should i include the cash flows from existing as well as new...
Free Cash Flow Valuation
Hi, I am using DCF /freecashflow to value two projects/firms. Both firms have no reinvestment needs and all cashflows are equal except that the first one pays out as dividends all the cash it earns. The second firm retains all the earnings in the banks and earns interest income on it. The value of...
unlever beta with preferred stock
Dear all, My query is the following (hope one of you could help): I'd like to take into account preferred stock when unlevering equity beta & then relevering the asset beta to a new equity beta, appropriate to the target cap. structure. If I pick Hamada hypothesis (existing tax shield & null debt...
FCFE and terminal value?
Hi! I'm trying to value a holding company that owns 3 projects, one of which has amortizing debt (changing leverage) for acquisition purposes. I'm fine with valuing the firm as a whole using FCFF and assuming it will be refinanced to a target D/E, but my questions are as follows: 1.- If I were to...
Valuation doubts
Hey guys, I looked around a lot for answers, but I'm still struggling to understand the answer to two important valuation related topics that I'm currently going through for my interview preparation. So, thought of posting it here. 1. Calculation of FCFF - the two accepted formulas seem to use EBIT...
Net Working Capital - Valuation model
To any/all who can advise on a question I have regarding the following, I'd have much gratitude: I am working out a Valuation model for a theoretical Steel MFG outfit, using a Free Cash Flow - NPV approach to find a value for the firm. I have mocked up financials, and only a small amount of...
For those good at calculating free cash flows
So free cash flow to equity is typically just cash flow from ops less capex (I guess some people include debt issued and repaid here as well), and free cash flow to the firm excludes interest expense but is similar. Let's say a company issued either debt or equity in a year and used the cash to...
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