Beruflich Dokumente
Kultur Dokumente
I. Valuation Formulae:
1. Perfect market assumptions (no taxes) M & M provide three conclusions: a. VL= VU b. rE = rA + (rU rD) (D/E) = rF + E (rM rF) c. WACC = rA = rE (E/(D+E)) + rD (D/(D+E)) = rF + A (rM rF) 2. M&M with Taxes: with Constant Debt in perpetuity a. VL= VU + D* TC, where TC = corporate tax rate b. rE = rU + (rU rD) (1- TC) (D/E) c. WACC = rA = rE (E/(D+E)) + rD (1- TC)(D/(D+E)) 3. M&M with personal taxes: with Constant Debt in perpetuity a. VL= VU + D*T, where T = [1-(1- TC)(1- TE)/(1- TD)] 4. M&M with tax and bankruptcy costs: with Constant Debt in perpetuity a. VL= VU + PV(Tax Shield) PV(Bankruptcy costs)
II.
Beta Formula:
1. With no taxes: A = E (E/(D+E)) + D (D/(D+E)) and E = A + (A D) x D/E 2. With taxes and fixed debt level: E = A{1+ (1- TC)D/E} if D=0.
III. IV.
IPO
1. % Underpricing = (First Day Price Offer Price)/Offer Price.