What should I use as the WACC for equity on a $150MM Tech Co.? There's no good public comps, is there a general number that I can use as WACC?
| +190 | UBS preparing for a October Layoff Massacre | 165 | 11m |
| +67 | Work and Suicide | 30 | 1m |
| +49 | Is 7 years in banking enough to retire, or am I delusional? | 30 | 1h |
| +46 | Do actual investment bankers despise IB TikTokers as much as I think they do? | 28 | 12h |
| +38 | A Message to Students Who Think this Job Will Fix Their Life | 8 | 18m |
| +34 | MM IB --> NYC IB? | 17 | 1d |
| +27 | Should I escape the matrix | 5 | 19h |
| +26 | UBS IB Balance Sheet Set to take a Hit | 7 | 3m |
| +24 | Negotiating VP Sign-On Bonus (NOT Tied to Deferred Comp)? | 22 | 1d |
| +23 | LevFin, First Interview (Ever) Help! | 5 | 1d |
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.
RichChigga, sorry about the lack of response. Maybe one of these topics will help:
More suggestions...
Hope that helps.
Depends on Capital structure, but due to assumed illiquidity, I’d say something in the 13-17% range. Sensitize it and see
Can I just assume 20%, since that's typically the ROI that PE company like to see on their equity investment?
-
Yeah, in the meaning that LPs demand 20-25%, WACC in an LBO/ PE is higher than “normal.” But you can’t just assume 20% since debt should drag it down.
Many firms have a group-wide rate for WACC (firm-wide, or specifically for industries/ company stage) it’s not that serious. Try to pull peers or use a sensitization between 13-20% for a desired output.
Remember that LPs/ Equity in Wacc are important to a degree, but The IRR to break-even is essentially the cost of debt; thus it is imperative to incorporate debt in WACC.
Minima autem quasi sit quaerat consequatur voluptatem. Vel et rerum rem soluta. Corporis ut architecto ipsam magni. Minus ut sed quia. Expedita veniam velit facilis molestiae.
Ut in eum ex. Mollitia velit ab eveniet enim voluptatem. Id impedit magnam quo aut hic explicabo. Vel est molestiae aut reiciendis minus nemo. Reprehenderit ad aut voluptatibus. Est optio nemo labore nesciunt earum voluptatem aspernatur et. Asperiores repellat temporibus aut.
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...