WACC, CoC, Structure
Convertible Bonds
How should WACC be calculated when the capital structure includes convertible bonds? The value of a convertible bond is split into two components: The value of the conversion […]
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Category: [:en]WACC, CoC, Structure[:]
Risk
The Impact of Derivatives on β
Below is a chart showing how dramatically a company’s equity beta can change with the expiration of derivative securities: Source: Corporate Valuation: Theory, Evidence and PracticeMark E. Zmijewski; […]
WACC, CoC, Structure
Employment Compensation with Options and Grants
Compensation through options and shares, as well as the issuance of similar warrants to external parties, represents a regular source of financing for an organization. Therefore, in valuation, […]
WACC, CoC, Structure
Excess Assets vs Capital Structure
While Valuation, Excess assets should be separated from core operations and valued separately, but here it is important to see what effect this separation has on the right-hand […]
Risk
When WACC Method Leads to Mistake
In some cases, when valuing an organization, using the WACC method for discounting cash flows can be misleading, and it is better to use the APV method.To understand […]
Risk
Non-Equity Betas
The table presents an example illustrating a widespread and significant error in valuation, related to the assumption of ignoring the beta coefficient of debt or other non-equity sources […]
Risk
levering Limitations
In the final sections, I want to address themes of capital valuation, where the formulas for financial “levers” and “revenues”, formulas you are familiar with, come into play. […]