DCF Equities Shares 
PCE
FEBRUARY 19, 2025
Understanding the role of carried interest in private equity, real estate, and hedge funds. Carried interest (or carry) is a way of rewarding professional investment managers with a share of an investments anticipated profits.
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.
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Francine Way
JULY 13, 2017
Calculating cost of debt, cost of equity, and weighted average cost of capital (WACC). Determining the year-by-year future non-equity claims from the latest 10-K, especially those that will occur during the forecast horizon, and their combined present value. Tangible Book Value = Book Value of Equity - Goodwill.
Mergers and Inquisitions
MARCH 13, 2024
Over the past few decades, growth equity (GE) has gone from an afterthought to a major asset class for huge investment firms. Some argue that GE offers the best of both worlds: the opportunity to fund innovation and growth – as in venture capital – plus the ability to limit downside risk and invest in proven companies – as in private equity.
Wizenius
APRIL 1, 2023
Diversity in equity claims: In most of the cases of publicly traded firms with one class of shares, all equity claims on the firm are equivalent.
Francine Way
JULY 18, 2017
Because dividends is a piece of equity, we can use the Capital Asset Pricing Model (CAPM) to calculate the proper Rate of Return (r). 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.
Wizenius
APRIL 8, 2023
Equity Value (today) = Equity Value at end of forecast period/ (1+Target rate of Return)^n 4) Because this is the valuation of the start-up before the VC invests his/her money in the business it is known as Pre-Money Valuation of the start-up 5) VC investors receive an equity share of the business in exchange for their investments.
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