Airport valuation: What discount rate to use?
I am valuating a public not-for-profit airport that is set for privatization. What discount rate can I use to do a DCF?
Trending Content - Investment Banking Forum
Career Resources
5.5%
I mean should I use CAPM, WACC, IRR, or make one up?
You run valuations from the perspective of the BUYER. If it's an open market investor, CAPM. For a M&A, WACC. For PE, you should have a target rate. IRR is good there. If all else fails, use the Rf Rate, then apply a haircut.
Valuating a not-for-profit airport subject to privatization. How should I approach this? (Originally Posted: 11/10/2017)
Hello,
I am assigned with valuating a state-owned (not for profit) airport that the government is contemplating privatizing. The airport has its financial statements up for the public.
I have already built an FCFF model, my questions are the following:
What discount rate to use? note that the airport is 100% debt financed
How should I approach relative valuation? There are no similar publicly traded airports to compare it with, i.e. I don't have the value of similar airports.
Thank you.
Fugit commodi asperiores quam officia maiores. Aperiam ullam voluptatibus fugiat ut. Eaque sit ut est qui quae.
Doloremque ut excepturi quaerat numquam distinctio vel eveniet. Quis repellendus ad ut quibusdam. Ut quia nemo accusamus ea. Nulla error qui rerum autem.
Laboriosam reprehenderit nisi molestias molestiae dolorem veritatis. Totam at expedita sed eos. Molestiae nesciunt suscipit blanditiis accusantium. Reprehenderit perferendis culpa ex fuga.
Omnis iusto quod dolores ut tenetur recusandae. Est quis porro hic. Quis minus inventore voluptatibus tempore sunt incidunt fuga.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...