DCF with subsidiaries overseas

Guys I really need your help. I'm new at this firm and I don't get much help, I most things by Googling or asking people I know. However, I took the biggest fucking project at the firm and now I need to do a DCF with multiple subsidiaries that I can't get data for, but that isn't the problem since I have some sort of consolidated annual report. 

How do I do a DCF when there is multiple subsidiaries that probably has different taxes from the country where the parental company is located? How do I approximate the tax? What adjustments do I need to do? 

The company that is being valuated is a car-company that builds and sells them. What should I look for? What do Ineed to adjust for most likely? 

Private Equity Interview Course

  • 2,447 questions - 203 PE funds. Crowdsourced from 750k+ members
  • 9 Detailed LBO Modeling Tests and 15+ hours of video solutions.
  • Trusted by over 1,000 aspiring private equity professionals just like you.

Comments (6)

Nov 18, 2021 - 5:21am

What you can do is:

1- Do a model (DCF with its own WACC) for each subsidiary and then just a sum of parts.

2- The easy way is just adjusting the WACC (risk free rate, cost of debt etc for the consolidated model). 

Nov 18, 2021 - 9:52am

Just add a country risk premium to cost of equity. E.g., if the company is half Nigeria, half US, and half of the Nigeria country risk premium.

Use blended tax rate for company.

you're definitely overthinking this. Most meaningful size companies have international subs

Array
  • 1
Nov 26, 2021 - 5:32am

Voluptas error libero et sed. Eos autem ipsa commodi consequatur.

Start Discussion

Total Avg Compensation

November 2021 Private Equity

  • Principal (8) $676
  • Director/MD (18) $575
  • Vice President (70) $361
  • 3rd+ Year Associate (70) $270
  • 2nd Year Associate (143) $252
  • 1st Year Associate (292) $219
  • 3rd+ Year Analyst (26) $159
  • 2nd Year Analyst (63) $134
  • 1st Year Analyst (189) $118
  • Intern/Summer Associate (21) $67
  • Intern/Summer Analyst (224) $59