Question for the firm value experts out there. If you're building to firm value, and you're looking to calculate total debt, would you include the negative adjustment of deferred financing fees? I offer as an example CST Brands: (http://www.sec.gov/Archives/edgar/data/1562039/00… ; control + F "Note 7. DEBT"). They have an adjustment of $14mm due to def. financing fees.
My intuition is that you would not include the adjustment in the calculation of firm value because it's just accounting trickery and you should care about the principal of the debt, but my colleague disagrees and believes it should be included. Any thoughts?
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