DCF Valuation
I'm looking at an acquisition of a portfolio of assets - some already operational and others in the development process. Acquisition will be on a cash-free debt-free basis, but will subsequently be financed at closing with a new senior facility.
Couple of questions just to make sure I'm on the right track here:
- Does it make sense run the DCF on a purely unlevered basis? I would determine a cost of equity and discount unlevered cashflows post-CAPEX. I thought about using WACC (i.e., including cost of debt), but ended up with a circular model because there is an LTV cap on the debt.
- Enterprise value here is just the discounted value less purchase costs, right? Is the equity value just EV - debt? If the debt is a CAPEX facility that will be drawn down over time, does it make any difference to the equity value today?
Thanks!
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