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Equity Research vs. Investment Banking: Careers, Compensation, Exits, and AI/Automation Risk

Mergers and Inquisitions

At the junior levels , entry-level professionals in both fields spend a lot of time in Excel working on models, valuations, and documents such as equity research reports and investment banking pitch books. This view is mostly wrong: The Excel-based work has a ton of overlap, with a few differences here and there.

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Infrastructure Investment Banking: Definitions, Deals, and a Dizzying Diversity of Verticals

Mergers and Inquisitions

Like renewable energy IB , different banks classify their groups differently, so you could find yourself working on everything from a data center REIT M&A deal to an airport financing to an IPO for a solar developer. It even includes elements of healthcare , industrials , and oil & gas investment banking. and sports (???).

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M&A Blog #17 – valuation (Comparable Company)

Francine Way

While different valuation professionals differ on which multiples to use based on the target’s industry, and so on; a few multiples have became analysts favorites: TEV/Revenue, TEV/EBITDA, and TEV/Tangible Book Value. Tangible Book Value = Book Value of Equity - Goodwill. to find the value estimate of a potential investment.

Valuation 130
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M&A Blog #16 – valuation (Discounted Cash Flow)

Francine Way

As I mentioned in my last post, Discounted Cash Flow (DCF) is a valuation method that uses free cash flow projections, a discount rate, and a growth rate to find the present value estimate of a potential investment. The major steps of DCF are: Identify extraordinary, unusual, non-recurring items from the target’s 10-Ks and 10-Qs.

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M&A Blog #20 – valuation (Dividend Discount Model - DDM)

Francine Way

To perform this forecast, we need the target’s dividend history again, the book value of equity and year-end shares outstanding, and the stock prices at year-end. Market Price as multiple of Book Value of Equity at year-end = Market Price at year-end / Book Value of Equity. Deciding on a forecast horizon (holding period).

Valuation 130
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M&A Blog #22 – valuation (less known valuation methods)

Francine Way

Thus far, we have covered four popular valuation methods in M&A (DCF, Comparable Company, Precedent Transaction, and LBO) and one less known one that is making its way out of the academic realm into the business world (Dividend Discount Method, DDM). The 1st one for today is the Tangible Book Value (TBV) method.

Valuation 130
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M&A Blog #15 – valuation (tools and data preparation)

Francine Way

Discounted Cash Flow (DCF) i s a valuation method that uses free cash flow projections, a discount rate, and a growth rate to find the present value estimate of a potential investment. The specific tools and data required for the analysis is determined by the type of valuation method used in the analysis.

Valuation 130