[Technical] Modeling/Valuing Declining Industries

Not all companies can maintain their current levels of net operating profit after tax. For example, DVD, game, and video rental businesses and wired telecommunications carriers face secular decline. In these instances, you need to modify the steady-state value with a variation of the Gordon growth model: Steady-state value = Net operating profit after tax […]

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Paper LBO

Sometimes you are given all the relevant information up front, and sometimes you need to ask the right questions (and perhaps be told to make logical assumptions). The following is the minimal information needed: Capital structure (% debt versus equity) Duration of investment for IRR estimation Projected EBITDA for FCF (may be given in the […]

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The Little Book of Valuation

Topics Two Approaches to Valuation All Valuation is Biased Simpler is Better Time is Money Discount Rate 5 Types of Cash Flows Simple Cash Flows Annuity Growing Annuity Perpetuity Growing Perpetuity CAPM Accounting 101 How Accountants Value Assets How Accountants Measure Earnings / Profitability Intrinsic Valuation Methodology Relative Valuation: 3 Steps Four Keys to Using […]

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