Hey guys so in merger models we use the inverse P/E and in the DCF we use the CAPM which is the opportunity cost of equity capital.
Would the merger model CoE be the opportunity cost of capital as well? How can we intuitively think about the CoE in a merger model (earnings/$ price of the stock) and compare it to the CoE in the CAPM?
Are they fair comparisons or is the CoE in a merger model just completely different with only the same name.
| +140 | Piper Sandler in talks to acquire PWP | 64 | 1h |
| +132 | Just One More Year | 11 | 2d |
| +126 | Interns without return offers, careers & perspective | 11 | 22h |
| +115 | UBS Appears to be Exploring Sale | 16 | 1h |
| +82 | Are all these UBS postings bullshit? | 21 | 1d |
| +76 | Bringing Deals as a Vice President | 24 | 7h |
| +68 | Paradise Is Paradise | 5 | 1d |
| +38 | Q&A | Investment Banking Analyst, UBS | 2 years in investment banking | 11 | 1d |
| +32 | M&A is Paradise | 1 | 2d |
| +31 | Will they pay Directors $1mm+? | 14 | 2d |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
Hey innobest, I'm the WSO Monkey Bot...do any of these help:
More suggestions...
Hope that helps.
Porro ipsam quia reprehenderit magni dolor. Consequatur eum ea aut molestiae facilis.
Sequi architecto at cumque possimus et in. Itaque rerum mollitia perspiciatis quae. Quos et eum dicta eaque. Mollitia sequi eos sapiente maxime ea tempore. Deserunt explicabo sed ratione repellat dolore explicabo temporibus totam.
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...