WACC, CoC, Structure
Optimal Leverage Range
The optimal level of financial leverage is determined, on the one hand, by the amount of tax savings an organization receives by deducting interest expenses, and on the […]
Archive
Category: Valuation, Measuring and Managing the Value of Companies – by McK.&Co, T. Koller, M. Goedhart, D. Wessels
WACC, CoC, Structure
Payout Decisions
The decision to pay dividends or repurchase shares impacts stock prices due to the expectations and signals such decisions create. Therefore, these decisions need to be systematic and […]
WACC, CoC, Structure
Capital Structure & Value
Financial theory tells us that there is an optimal capital structure derived from tax savings and the risks of financial leverage, but it says little about how to […]
Mergers & Acquisitions
Divestitures
The market views divestment positively as an event, even though management usually avoids such decisions. However, divestment does not always create value and can sometimes result in negative […]
Mergers & Acquisitions
Stock vs Cash Acquisition
Mergers and acquisitions can be executed either with cash or by transferring the shares of the new company. What is the difference? When the acquisition is done with […]
Mergers & Acquisitions
Value Destructive Accretive Acquisition
Managers often justify mergers and acquisitions by claiming that the operation is accretive, meaning that EPS (earnings per share) increases, and therefore shareholders should be satisfied. However, the […]
Mergers & Acquisitions
Architypes for Value-Creating Acquisition
According to McKinsey’s research (1999-2013, 1770 transactions), the combined value of the acquiring and acquired organizations increased by an average of 5.8% as a result of acquisitions. In […]