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Brokers who detail the calculation of cost of equity in their notes
Hello, I'm searching some names of brokers who detail how the calculate the cost of equity (with equity risk premium and son on) brokers note. Have you any name of brokers which do this ? Thanks :)
Young Oil Industry Company - WACC Calculation
Trying to calculate WACC for a business that is born out of shale revolution expected to be cash flow positive in 2015. Need to calculate both from private and public company perspective. Looking at several research publications by Plummer, HBS etc that give a range of 20-35% for late stage...
cost of capital for a company with no cash equity
theoretical question for you guys, say you have a private company that has no cash equity but 5x debt at 10%. if you wanted to do a DCF , what is your WACC ?
Manipulate WACC?
Hi, I was wondering if a firm can change its WAAC by restructuring its debt, so that it is mostly short run - eventually reducing YtM (reduction of risk)? I guess you cannot just restructure debt like that because it matches an assets cash flow and if the cash flow increases so that you could, the...
Effect of Cash on WACC
Could someone explain how cash balance affects the WACC ? How would the WACC of a company compare if it has no cash versus if it had a cash balance of $1bn? My guess is that cash is a part of equity and having a large cash balance would increase the proportion of equity in the capital structure,...
Industry risk premium
Hey monkeys, im doing a DCF for a target media company and i need to estimate the cost of equity, any one know where i can find a list of industry risk premia? Any suggestions on any other approach are welcome, thanks
Where to find WACC?
Don't have access to Bloomberg or any other paid subscription services, so was wondering if anyone knows any free sites where you can find public companies WACC ? Wikiwealth does it, but their method of calculation doesnt seem the most accurate.
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Is Return on Capital (ROC) affected by changes in debt
What happens to ROC if you increase debt...I believe it would just stay the same, correct?
WACC if there is no beta?
fellow monkeys, im fairly new to valuation so please excuse if this question is actually really easy. i currently have to valuate an automobil supply company that is not publicly traded (and therefore does not have a beta?) and i was wondering how to calculate the WACC if you dont have a beta to...
Question about NPV and WACC
Hi my name is Luis and I have this question for my finance class. I have this question and i have searched for hours so I came here to see if anyone can help me answer this. How would the discount rate and the NPV of a project change with the firm being sued by a Human RIghts Organization and why? I...
NEED GENIUS HERE -COME QUICK
say, this segment of a company is expected to produce -100K cash flow till perpetuity how do i discount it? discounting negative value makes no sense eg, if my cost of capital was 10% i would have a PV of -1M if my cost of capital was 50% i would have a PV of -0.2M clearly this does not make sense,...
Doubt
A company is considering investing in a new project. All investment will come from debt (10% rate, for example). Is it right to discount the project cash flows at a 10% rate or should I calculate company's new WACC considering this new debt and discount the project at WACC?
WACC / Discount rates for oil sector
does anybody know what rates are typically used? obviously will vary from country to country, particularly thinking off Russia (see the TNK-BP/Rosneft deal). Is this a fair valuation
Earning Cost of Equity
What are the ramifications of a company not earning its cost of equity? I read an investment pitch that noted a particular company could not earn its cost of equity but I was wondering why that even mattered on the equity side since the company generally only derives revenue on the IPO . Could...
Market Risk Premium
I am trying to figure out WACC . In practice, what risk-rate do you use? What market risk premium do you choose? something like 5%? In addition, for a company with a market cap of 1billion USD. What size premium do you apply? Would appreciate your insights.
Interest rates on debt depending on capital structure
I am doing an assignment on capital structure and I am trying to estimate the optimal capital structure for a company. In order to do so, I need interest rates on debt depending on the percent of firm financed with debt. Can someone help me with the interest rates? I would require a total of 7...
What are some common acronyms used on WSO?
If you are confused by all the lingo getting thrown around Wall Street and the WSO forums, you've come to the right place. We know it can be confusing but don't worry, we are here to help! Below you will find a comprehensive list of finance acronyms for words and phrases in finance. This is a great...
Calculating cost of equity for a company with negative book equity
I'm doing a valuation on a privately held company with a negative book value of equity. The equity is negative because the company is in its early years, but has already distributed far more than its initial contribution+earnings. The ability to make distributions comes from another line of business...
What counts as "debt" in a company's capital structure?
I'm trying to model out an mid stage tech venture, and the only things that could count as "debt" are a government granted forgivable loan, and some convertible debentures. The government loan is forgivable after 5 or so years if they meet certain targets, but it is secured against all the assets of...
Debt in WACC
Hi, guys I have 2 questions. 1. Please help me understand what debt contains, when calculating WACC When I calculate debt for WACC , I take following things : - Commercial papers (short-term debt) - Revolver debt (short-term debt) -Long-term debt -Capital Leases - Current portions of capital lease...
What is the WACC with No Long Term Debt?
When calculating WACC , what if a firm has no long-term debt, but has current liabilities (Working Capital line items only) How do we go about computing the D/E ratios? Or is the WACC basically the cost of equity.. Thanks. Weighted Average Cost of Capital with No Long Term Debt If a company has no...
Statutory tax rate in WACC
Can someone please explain as to why we use statutory tax rate (instead of the effective in the calculation for WACC ?? One reason I could think of is that statutory is more normalized.
Determining WACC for negative shareholder equtiy companies
I'm looking at a company whose shareholder's equity is
WACC for a small business
Hi all, Hoping I can get some help here. I need to do a valuation for a very small company. Its a consulting business that sources its clients/customers mostly through their website. Anyway, I am intending on doing a DCF to value the company, but my biggest issue is calculation a WACC . Anyone got...
Equity Portion of WACC in an IPO
There was a recent question about valuation methods for an IPO and the involvement of WACC . It got me thinking about the equity portion of WACC in such a situation. Considering it is an IPO , does that mean that the only type of equity that can exist is unregistered private placement or are there...
Question about WACC
When discerning the book value of debt for WACC , do you look at the book value of ALL liabilities including current liabilities, or do you just look at the book value of Long-Term Liabilities. Thanks in advance for anybody willing to help.
Calculating WACC for Private Company with 100% Equity
Does anyone know how to calculate the WACC (or any appropriate discount rate) for a startup service company with no debt, funded through a mix of employee capital and venture capital? I don't think this matters, but no dividends are paid over 5 year projections (it's a growing company). WACC...
WACC formula?
Okay so I got this interview question : When you use WACC for a DCF model you have E+D+P in your WACC formula, but isn't it EV already? When you do a DCF you are calculating its EV , which you already have in your WACC formula. You are using EV to calculate EV . Isn't it a circular? and how do you...
Cost of Capital vs. WACC
Concise interview answer to what the difference of cost of capital vs WACC ? What is the Cost of Capital vs. the WACC? When talking about discount rates, the term “cost of capital” and ”WACC” are sometimes used interchangeably - but it is important to draw a distinction between the two. Put...
WACC - Rate of return
Hi guys, I haven't done Valuations for a while and I'm currently trying to understand it again. Hope you can help me: Let's assume a company has an EBIT of 1,000,000 and we acquire it at 4x EBIT --> 4,000,000 What's the rate of return? I would first calculate the cost of equity (2,000,000) and cost...
need help finding Goldman Sachs WACC
I need help on finding the WACC for Goldman Sachs group for their fiscal year of 2009 ending in Dec 31st ( It's for my financial management master's class). If anybody here could give me the numbers and calculations quick that would be greatly appreciated!
Need help with interview question
If I borrow money to invest into the stock market, what is the appropriate discount rate to use for the investment? Is it the cost of debt b/c 100% of the money is borrowed? Or is it the cost of equity because the money is invested into the stock market?
Most important part of a valuation???
Ok everybody...I would love to get as much input on this from as many people from as many countries as possible. I just spoke with a senior banker (remember I am in India), and he told me that in the entire valuation process significantly more importance is given to the creation of the Financial...
WACC and PPP Cost of Captal
Why is a MNC's WACC in one country higher than it's PPP Cost of Capital for the same country? Is it because of short term inflation rate exposure?
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