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The Dividend Discount Model (DDM): The Black Sheep of Valuation?

Mergers and Inquisitions

Step 3: Project the Changing Cash and Debt Balances and the Net Interest Expense If the company needs extra funds to maintain its Cash balance, you can assume it issues Debt; if it has excess Distributable Cash Flow, you can assume it retains the Cash. In our forecast, Cash rises too much, and Debt / EBITDA goes from 5.0x

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Cooley’s 2023 Cross-Border M&A Year in Review: Navigating Choppy Waters into a More Buoyant 2024

Cooley M&A

The higher interest rates escalated borrowing expenses, making mega-deals (deals valued at $5 billion or more) significantly more expensive, due to their heavy reliance on debt financing, and impacted valuation multiples with higher discount rates. The aggressive rate hikes contributed to the decline in M&A activity in 2023.

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