Technicals · 02
What a business is worth, and why two methods disagree.
Discounting, cost of capital, free cash flow, and the two routes to a number: the cash a business will produce, and what the market pays for similar ones. Both are built here on real filings.
- 01What a business is worthExplain the difference between enterprise value and equity value, and cross the bridge both ways. assumes an earlier lesson11
- 02Time value and discountingDiscount any stream of cash flows by hand and explain what the rate is doing.9
- 03Cost of capitalBuild a WACC from scratch: CAPM, a comp set's betas, unlever, relever, weight. assumes an earlier lesson13
- 04Free cash flowBuild FCFF from EBIT and say why interest is missing, then convert it to FCFE. assumes an earlier lesson11
- 05Building a DCFBuild a five-year DCF on real filed numbers and defend every assumption in it. assumes an earlier lesson15
- 06Terminal valueSay what fraction of a DCF is terminal value and spot a growth rate that is an error. assumes an earlier lesson11
- 07Trading compsBuild a comp set, compute the multiples, and show what a bad comp does to the median. assumes an earlier lesson12
- 08The football fieldPut every method on one chart and read where they disagree. assumes an earlier lesson8
Being writtenPrecedent transactions.