I am modeling aof a company with operating losses and historicial NOLs. However, leverage (capital leases) is driving the company to be NI negative. Therefore, on a pre-tax basis it is positive.
In a DCF model you exclude leverage and add taxes. If I do that the company will be undervalued because over the next five years the company isn't paying taxes. Therefore, should I assume a lower tax rate or exlude taxes all together.
Further, the value of thewill be impacted by the above as it will determing how much of the NOLs will be used.
Any valuation experts out there that can help?