Valuation methods dcf - Study guides, Class notes & Summaries

Discounted Cash Flow Model Exam Wallstreet Prep LATEST UPDATE 2024 / 2025 PASS A+ 1. three equity securities valuation methods: dividend discount model, com-prables model, discounted cash flow models 2. essense of DCF: using cash flows to value equity shares 3. earnings are not optimale in robust equity valuation: do not adequetely incor-porate investments and ROIC 4. ROIC:return on capital investments 5. investments include: operating and capital 6. instead of using earnings: use free...

Discounted Cash Flow analysis intrinsic method of valuation Based on the present value of the company's future cash flows Concept is based on the going concern principle in accounting that firms are expected to operate into perpetuity Firm total enterprise value = PV of FCFS + PV of terminal value, both discounted using WACC PV of fcfs, discounted using WACC + PV of Terminal Value, discounted using WACC = Implied Total Enterprise Value today FOUR major steps in performing a DCF analysis: 1...

Equity Value formula Second Method - answer-LFCF/WACC =Equity Value Not as common method Levereged Free Cashflow Only from equity Providers For a sensitivity analysis what is the excel shortcut - answer-Alt A W T For row input you put terminal value growth rate For Column input cell you put WACC How do we evaluate the importance of the model inputs? - answer-We isolate the drivers, by their importance on the model. They should have the biggest impact on the volitility and carr...

What is an LBO? In a leveraged buyout, 1) PE firm acquires a company using D + E 2) Operates it for a several years with operating improvements 3) sells it at the end of the period to realize a return on that investment Walk me through the mechanics of an LBO model. 1) Assumptions 2) S&U 3) Adjust Balance Sheet - Debt and Equity - Goodwill 4) Project 3 statements 5) Project FCF 6) Debt and Interest Schedule 7) Exit Calc (MOic and IRR) 8) Sensitivity Tables How do you as...

Term: What are the 8 steps of the valuation process? Definition: 1. Define the problem, 2. scope of work, 3. data collection & property description, 4. data analysis, 5. land value opinion, 6. application of the approaches to value, 7. reconciliation of value indications and final opinion of value, 8. report of defined value. Term: Valuation process Definition: A systematic procedure employed to provide the answer to a clients question about the value of real prope...

Argus Certification Exam Practice Questions and Answers Solved Once a Property Asset Type is selected it cannot be changed (T/F) False The Analysis Begin date defaults to the current Month and Year (T/F) True Which of the following is a classification type in AE? Select all that apply. a. Property b. Tenant c. Region d. Lease a. Property b. Tenant Multiple properties can be opened simultaneously in ARGUS Enterprise (T/F) True What is the extension of a property asset file in A...

ARGUS QUESTIONS WITH COMPLETE SOLUTIONS What is included in the Revenues Tab? (3) Miscellaneous Parking Storage Amount 1 the entry in the Amount 1 field will be interpreted as a currency amount Amount 1 X Amount 2 The entry in the Amount 1 field will be multiplied by the entry in the Amount 2 field Currency Amount / Rentable Area The entry in the Amount 1 field will be interpreted as a currency amount per rentable area Currency Amount / Occupied Area The entry...

3 factor to keep in mind when looking for "perfect bond" - answer-date of issuance: look for bonds issued over last 1-2 years maturity date: bonds expected to mature in the next 10-20 yrs size: look for bonds with substantial size compared to overall debt issues A company has a high debt load and is paying off a significant portion of its principal each year. How do you account for this in a DCF? - answer-Trick question. You don't account for this at all in an Unlevered DCF, b...

MGT 8803 Financial Management Latest 2023 Rated A Shareholders owners of a corporation; residual claimants Primary Financial Goal of Public Corporation To create economic value for its shareholders Capital Budgeting/Expenditure/Investment Decision process of determining exactly which assets to invest in and how much to invest Future Value = PV x (1+r)^t Present Value amount of money you would need to invest today in order to duplicate some future dollar amount = FV / (1+r)^t Net Present Val...

A company has a high Debt balance and is paying off a significant portion of its Debt principal each year. How does this impact a DCF? - answer-Trick Question. you don't account for this at all in an Unlevered DCF because you ignore interest expense and debt principal repayments. In a levered DCF you factor it in by reducing the interest expense each year as the Debt goes down and also by reducing Free Cash Flow by the mandatory repayments each year. The exact impact i.e. whether the im...