Shearman & Sterling

MARCH 6, 2018

​On February 23, 2018, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery ruled, based on his own discounted cash flow ("DCF") analysis, that the fair value of AOL Inc. ("AOL") was below the deal price paid by Verizon Communications Inc. ("Verizon") to acquire it. In re: Appraisal of AOL Inc.,

DCF Analysis 40

DCF Analysis DCF Discounted Cash Flow Valuation 40

Shearman & Sterling

AUGUST 22, 2016

On August 11, 2016, Vice Chancellor Sam Glasscock III of the Delaware Court of Chancery relied on his own discounted cash flow ("DCF") analysis to determine the fair value of ISN Software Corp. ("ISN") in an appraisal action brought by two minority shareholders following the merger of ISN with its wholly-owned subsidiary.

DCF 40

DCF Discounted Cash Flow Utilities Valuation 40

Francine Way

JULY 12, 2017

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.

Discounted Cash Flow 130

Discounted Cash Flow Valuation M&A DCF 130

Shearman & Sterling

NOVEMBER 7, 2017

See Shearman & Sterling LLP, Delaware Chancery Court Utilizes DCF Method To Determine Fair Value Of ISN Software Corp.,

DCF 40

DCF Discounted Cash Flow Mergers IT 40

Wizenius

MAY 14, 2023

Terminal Value The terminal value is an essential component of a discounted cash flow (DCF) analysis. It represents the value of a business or an investment beyond the explicit projection period used in the DCF model. However, most companies have a longer lifespan and continue to generate cash flows well beyond that period.

DCF Analysis 52

DCF Analysis Discounted Cash Flow DCF Valuation 52

How2Exit

FEBRUARY 23, 2023

Concept 6: Value Assets With DCF (Discounted Cash flow) One of the most important tools in the negotiation process is the discounted cash flow (DCF) method. The equation for the DCF method is CFT divided by T, where CFT equals cash flow in period T, and R equals discount rate.

Business 130

Business Negotiation DCF Acquisitions 130

Francine Way

JULY 13, 2017

As we have previously covered what are needed to complete these steps in our DCF discussion , I would refer to those steps (1 through 7) here. As we have previously covered what are needed to complete these steps in our DCF discussion , I would refer to those steps (9 through 12) here. They are basically the same for this exercise.

Valuation 130

Valuation M&A DCF Book-building 130

Wizenius

JUNE 12, 2023

Discounted Cash Flow (DCF) Analysis: DCF analysis is commonly used to value companies, even in volatile industries. Use a range of scenarios, including optimistic, base case, and pessimistic scenarios, to capture the potential outcomes.

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DCF Analysis Discounted Cash Flow Risk Assessment DCF 52

Mergers and Inquisitions

MAY 3, 2023

It can be useful for certain companies, such as power and utility firms and midstream (pipeline) operators in oil & gas … …but it’s also much harder to set up and use than a standard DCF. The basic set of steps looks like this: Step 1: Forecast Revenue and Expenses This is the same as in any other 3-statement model or DCF.

Valuation 64

Valuation DCF Debt Financial Modeling 64

Sun Acquisitions

NOVEMBER 17, 2023

Discounted Cash Flow (DCF): DCF is a fundamental valuation method that estimates the present value of a company’s future cash flows. DCF provides an intrinsic value perspective, considering the target company’s unique financial characteristics. It involves forecasting cash flows and applying a discount rate.

Mergers and Acquisitions 59

Mergers and Acquisitions Valuation M&A Mergers 59

Francine Way

JULY 11, 2017

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. Information listed in the DCF analysis: See the items listed under DCF above. A 5- or 10- year historical data is preferable.

Valuation 130

Valuation M&A DCF Financial Statement 130

Sun Acquisitions

OCTOBER 13, 2023

Discounted Cash Flow (DCF) analysis is a commonly used income-based valuation technique. DCF involves estimating future cash flows and applying a discount rate to bring those future cash flows to their present value.

Mergers and Acquisitions 59

Mergers and Acquisitions Valuation Mergers Acquisitions 59

Peak Frameworks

JUNE 7, 2023

Cash Flow from Operations in Valuation Models Valuation models such as the Discounted Cash Flow (DCF) model use CFO as a key input. For example, Alphabet's (Google's parent company) consistently strong CFO has been a positive indicator in DCF models and has contributed to its high valuation.

Financial Analysis 52

Financial Analysis Discounted Cash Flow DCF Valuation 52

Francine Way

JULY 18, 2017

Projected Book Value of Equity at the end of the 15 years = from the proforma balance sheet that we developed in our DCF post. Because this step is similar in this method as it is in the other valuation methods (DCF, Comparable Company, etc.),

Valuation 130

Valuation M&A DCF Shares 130

Peak Frameworks

MAY 2, 2024

Valuation Techniques: Employing discounted cash flow (DCF) and comparative analysis to ascertain the target’s value. The Role of Financial Analysis in Vertical Mergers Financial analysis underpins the decision-making process, involving: Financial Modeling: Creating models to forecast the financial performance of the merged entity.

Mergers 52

Mergers Mergers and Acquisitions Financial Analysis Discounted Cash Flow 52

Focus Investment Banking

APRIL 7, 2024

Discounted Cash Flow (DCF) Analysis: This is the most common valuation method involving discounting future cash flows back to their present value. This can lead to a more cautious approach from PE firms, as higher rates can impact the future cash flows and growth prospects of potential investment targets.

Private Equity 52

Private Equity Valuation Equities Business 52

Wizenius

JUNE 25, 2023

Adjustments for Negative Cash Flows: Incorporate adjustments in the DCF analysis to account for the negative cash flows in the initial years. The WACC considers the cost of debt and equity financing and reflects the risk associated with the company's capital structure. Adjust the WACC to account for the company's specific risk profile.

Financial Modeling 52

Financial Modeling Financial Models DCF Analysis Investment Banking 52

Shearman & Sterling

JANUARY 2, 2017

While the court conducted its own DCF (discounted cash flow) analysis drawing from expert submissions, Vice Chancellor Laster ultimately deferred entirely to the deal price, finding that the sale process was fair and based on meaningful competition in a well-functioning market, and thus generated reliable evidence of fair value.

Discounted Cash Flow 40

Discounted Cash Flow DCF Sale Stock 40

Wizenius

JUNE 11, 2023

Discounted Cash Flow (DCF) models can be adjusted by incorporating inflation rates and currency exchange rate assumptions into cash flow projections. Examine the impact of currency fluctuations on revenue and expenses, especially if the company generates a significant portion of its revenue or incurs expenses in foreign currencies.

Financial Modeling 52

Financial Modeling Financial Models Financial Statement Discounted Cash Flow 52

Wizenius

JUNE 5, 2023

Highlight your experience in performing company valuations using various methods, such as discounted cash flow (DCF) analysis, comparable company analysis, or precedent transactions. Valuations: Demonstrate your expertise in valuations, as it is a fundamental skill for investment banking professionals.

Investment Banking 52

Investment Banking Bank Banking Investment 52

Shearman & Sterling

DECEMBER 19, 2017

After a trial, the Court of Chancery had disregarded the deal price and instead applied its own discounted cash flow ("DCF") analysis, arriving at a valuation of $17.62 In re Appraisal of Dell Inc., 565, 2016 (Del. per share reflecting an approximate 28% premium.

Discounted Cash Flow 40

Discounted Cash Flow DCF Private Equity Shares 40

Wizenius

JULY 30, 2023

Lets see how this works Most of the variations of Financial models in investment banking mostly revolve around 1) DCF 2) M&A 3) LBO 4) Comparable & Transaction Comps Idea Bank - From Scratch to Template: Build a comprehensive version of each of the above varieties of financial models from scratch.

Financial Modeling 52

Financial Modeling Financial Models Investment Banking Bank 52

Mergers and Inquisitions

JANUARY 10, 2024

You will very rarely get exposed to the type of financial modeling that bankers complete: 3-statement models , DCF models , M&A models , LBO models , and so on. Think: benchmarking portfolios rather than modeling companies. As with the job itself, the theme is breadth over depth. Wealth Management vs.

Investment Banking 59

Investment Banking Management Bank Banking 59

Francine Way

JULY 14, 2017

Because this step is similar in this method as it is in the other valuation methods (DCF, Comparable Company, etc.), Given its advantages and disadvantages, Precedent Transaction is best used in conjunction with other valuation methods (like DCF and Comparable Company).

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Valuation M&A Shares DCF 130

Devensoft

AUGUST 22, 2023

The Enterprise Value Calculator incorporates various techniques, such as the discounted cash flow (DCF) method, market multiples, and comparable transactions analysis. Discount Rates Discount rates are used in the DCF method to determine the present value of future cash flows.

Valuation 52

Valuation M&A Utilities Mergers and Acquisitions 52

Shearman & Sterling

JULY 25, 2017

Noting that the appraisal statute requires the exclusion of "any synergies present in the deal price," the Court evaluated the competing discounted cash flow ("DCF") analyses offered by the parties and adopted the $2.13 per share deal price.

Discounted Cash Flow 40

Discounted Cash Flow DCF Corporation Mergers 40

Francine Way

JULY 19, 2017

Thus far, we have discussed five valuation methods: DCF, Comparable Company, Precedent Transaction, LBO, and Dividend Discount Model (DDM). For the purpose of our post, the output variables should be the per-share equity value returned from our DCF, Comparable Company, etc. Well, in the real world, there is no certainties in business.

Valuation 130

Valuation M&A Stock DCF 130

Mergers and Inquisitions

MARCH 13, 2024

Financial Modeling: Like private equity, 3-statement models are common, as are valuations and DCF models , but LBO models are less common since not all deals use debt. You could easily get asked to complete an LBO modeling test, a 3-statement model, or a DCF, and standard IB interview questions and VC interview questions could come up.

Private Equity 105

Private Equity Equities Capital Portfolio 105

Mergers and Inquisitions

NOVEMBER 1, 2023

Interview Guide : There’s a DCF case study based on Attendo AB, a healthcare facility company in Sweden. Venture Capital Modeling : There are examples of early-stage and pre-revenue biotech valuations here, including a Sum-of-the-Parts DCF for Ventyx.

Private Equity 59

Private Equity Healthcare Equities Middle Market 59

OfficeHours

OCTOBER 17, 2023

If you do, you may be able to afford to have less in your emergency fund in case something goes wrong (i.e. you get laid off or some other event happens resulting in a decrease in income).

Private Equity 130

Private Equity Debt M&A Investment 130

Francine Way

JULY 17, 2017

It is worth noting at this junction that the debt-interest schedule, specifically the revolver portion of it, functions as a plug to the 3-statement model; very similar to the plugs we used in DCF a while back. Because this step is similar in this method as it is in the other valuation methods (DCF, Comparable Company, etc.),

Valuation 130

Valuation M&A Debt Book-building 130

Francine Way

JULY 20, 2017

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).

Valuation 130

Valuation M&A Business IT 130

Mergers and Inquisitions

DECEMBER 20, 2023

Yes, you can read guides , take courses , and watch YouTube videos , but you should also spend a few hours building simple DCF models or 3-statement models to learn the key concepts. With the technical prep, the most important point is to learn by doing.

Investment Banking 105

Investment Banking Bank Banking Investment 105

Mergers and Inquisitions

SEPTEMBER 20, 2023

A: Assuming it is developing patent-protected products, you usually use a Sum-of-the-Parts DCF where you project revenue and expenses for each drug, discount the cash flows to Present Value, and then add them up. Q: How do you value a biotech startup?

Capital 59

Capital Valuation Investment Portfolio 59

Mergers and Inquisitions

JUNE 21, 2023

Most of our students and coaching clients in the Middle East have had to complete modeling tests or case studies, even for entry-level roles, and something like the 90-minute 3-statement modeling test or DCF model on this site could easily come up.

Investment Banking 105

Investment Banking Bank Banking Investment 105

RKJ Partners

AUGUST 6, 2017

Below are the six recognized methodologies with short explanations of each: Discounted Cash Flow (DCF) Analysis: This analysis derives an ‘intrinsic’ value of a company. This means that the method evaluates the future cash flow of the company and then discounts those cash flows to the present day.

M&A 40

M&A Valuation Mergers and Acquisitions Discounted Cash Flow 40

Mergers and Inquisitions

OCTOBER 18, 2023

You’ll also have to spend time learning/reviewing the technical questions, as the day-to-day work in ECM and DCM is far removed from subjects like Equity Value vs. Enterprise Value or a DCF model. Should You Accept a Capital Markets Internship or Job Offer?

Investment Banking 59

Investment Banking Capital Market Recruitment Capital 59