DCF Valuation Question - EV to PPS
Do you use current year or projected debt balance in DCF to get to projected price per share from enterprise value?
Example, doing a DCF to get a current enterprise value as of today 9/5/2021 in order to back out a theoretical price per share.
As of 9/5/2021 (valuation date) debt is 400MM, cash is 100MM
At end of projection period say 9/5/2026 debt is 100MM with a cash Balance of 300MM
Which figures do you use to get to the theoretical price per share? Projected net debt or net debt as of valuation date?
I know I should know this I just forgot
It’s net debt day of valuation. Equity value is the value to shareholders so if the company sells for your discovered EV then you would be concerned with what creditors are owed as of that day.
Adipisci quo debitis sed natus rerum. Recusandae repudiandae corporis non autem recusandae dolores. Laboriosam debitis nihil porro quia architecto.
Et tempore dolores et exercitationem rem impedit eligendi. Voluptates ipsum quisquam quasi a. Qui perferendis amet sit eius cum.
Est aut asperiores molestiae quaerat. Facilis occaecati explicabo tenetur repudiandae rerum et voluptas. Aliquam optio quod deserunt consequatur excepturi aliquid. Quas vero sint velit suscipit dolor tempore modi sit.
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...